Money, Money, Money!
On Monday, February 28, 2022, Minnesota Management & Budget (“MMB”) released the February budget forecast, showing an increase in the already record-breaking projected surplus. The historic excess of funds surged past expectations adding an additional $1.5 billion since originally projected last November. According to MMB, the $9.25 billion surplus for fiscal year 23-24 is the result of higher income tax receipts, increased consumer spending, and higher corporate taxes. MMB also noted that the additional projected surplus is largely due to one-time revenue and spending adjustments and projections for FY 24-25 remain largely unchanged. Naturally, both legislative leaders rushed to comment on the influx of cash, here’s what they said:
Senate Republican Caucus Leadership:
Senate Republican leadership, including new Majority Leader Jeremy Miller (R – Winona) have consistently proposed permanent tax cuts, including the exclusion of social security disability benefits from the state’s income tax, which would cost approximately $539 million. The Senate Republican proposal would also reduce the first-tier tax rate from 5.35% to 2.8%, a move Republicans say will return $8.5 billion to taxpayers over three years. Commenting on the projected surplus, Senate Finance Chair Julie Rosen (R – Fairmont) said “This is out of control. A $9 billion surplus means government took way too much from taxpayers at a time when people are still struggling to afford everyday life. We have a duty to give it back with real, permanent, significant tax relief.”
House DFL Caucus Leadership:
House DFL leadership did not release any additional budget plans in response to the updated budget forecast, however, Speaker of the House Melissa Hortman (DFL – Brooklyn Park) said “Now it’s our job to address the challenges that people are facing and ensure that workers and families are benefiting from the economic growth they are helping create” House Majority Leader Ryan Winkler (DF – Golden Valley) focused his remarks on Republicans’ proposed tax plan “Democrats will oppose extreme Republican Proposals that shower the biggest corporations and wealthiest individuals with tax cuts that could tank budget stability in Minnesota for decades.” It is unclear if Democrats will release additional plans in the coming days, however, we can be certain these additional funds will be the cause of much political strife.
Races to Watch:
One of the most notable races to keep an eye on going forward pits Senate Environment Policy and Legacy Finance Chair Carrie Ruud (R – Breezy Point) against Senate Mining and Forestry Chair Justin Eichorn (R – Grand Rapids). During the last redistricting, Sen. Ruud was also paired with a caucus mate when she and former Majority Leader Paul Gazelka
(R – East Gull Lake) were drawn into the same district. At that time, Sen. Ruud moved into a neighboring district to avoid a primary fight. However, Sen. Eichorn, only on his second term, has four school-aged children, making it considerably harder to pick up and move. Both are expected to seek the party nomination via the August primary.
The next matchup to watch for is Senator Ann Johnson-Stewart (DFL – Minnetonka) vs Representative Kelly Morrison (DFL – Deephaven). These relatively fresh legislators will go head-to-head for the newly formed senate district 45 which includes the communities of Orono, Wayzata, Mound, and parts of Minnetonka. Sen. Johnson-Stewart first took office in 2020 swinging a district that had not been controlled by the DFL for almost a decade by a whopping 10,000 votes. However, the early stages of Rep. Morrison’s candidacy have already landed some major endorsements, such as Congressman Dean Philips from Minnesota’s 3rd congressional district.
Federal Update
Bipartisan push for Ukraine aid as White House requests $6.4 billion
The Senate returns today with plans to hit the ground running on a multibillion-dollar emergency aid package to Ukraine. Majority Leader Charles E. Schumer said Sunday that Democrats are looking at a $6.4 billion package, a figure matching the Biden administration’s request.
As Russian troops close in on Kyiv, there’s strong bipartisan support on Capitol Hill to provide humanitarian, economic and security assistance to Ukraine. Democrats are ready to move fast, as are Republicans, who have criticized President Joe Biden for not acting more quickly to provide more aid to Ukraine and heavier sanctions on Russia. Schumer said Sunday that he aims to fold the aid into an omnibus spending package needed by March 11 to avoid a partial government shutdown. Any new funding for Ukraine would come on top of $1 billion in security assistance the U.S. has committed over the past year.
Chris Coons, D-Del., the top Senate appropriator for foreign aid, had said last week he sees bipartisan support for a $10 billion emergency aid package. He flagged many needs he said aren’t covered in fiscal 2022 funding levels still under negotiation. Those needs include more security assistance for Ukraine; higher military costs to cover the deployment of 7,000 U.S. troops to Europe; an expected "millions" of refugees who are likely to flee Ukraine; and more Treasury Department funding to implement and enforce new sanctions on Russia.
More than 360,000 people have fled Ukraine for neighboring countries in recent days, the United Nations reports. Over the weekend, the State Department and the U.S. Agency for International Development freed up nearly $54 million in humanitarian assistance in response to Russia’s invasion, on top of $52 million in earlier funding.
Senate prepares for Jackson nomination
Supreme Court nominee Ketanji Brown Jackson will meet with Senate Majority Leader Charles E. Schumer on Wednesday morning, as the Senate gears up for a confirmation battle. President Joe Biden made history when he nominated Jackson last week. She is the first Black woman ever tapped for the lifetime role. The nominee is a former clerk to Justice Stephen G. Breyer, who announced he would retire at the end of this term. “Justice Breyer, the members of the Senate will decide if I fill your seat, but please know that I could never fill your shoes," Jackson said.
Jackson currently sits on the U.S. Circuit Court of Appeals for the D.C. Circuit. Her nomination for that seat last year was backed by three Republicans — Susan Collins of Maine, Lindsey Graham of South Carolina and Lisa Murkowski of Alaska. But the battle to seat her on the highest court will likely prove far more contentious and uncertain. Senate Democrats plan for that process to be swift and completed within weeks. Biden highlighted that Jackson is a working mom with law enforcement in her family background. Those qualities, combined with the historic nature of her nomination, might help garner more support — or at least stave off some critics.
Please reach out to any of the Larkin Hoffman Government Relations team members with any questions.
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