Feb 6, 2024 - News

"No new taxes": Minnesota Senate tax chair vows to block increases this session

Ann Rest sits at a black chair during a committee hearing in a pink shirt and black sweater

Chair Rest presiding over a committee hearing. Photo: Senate Media Services

Minnesota Senate Tax Chair Ann Rest says she has "only one word" for colleagues hoping to pass significant new spending or tax hikes this year: No.

Why it matters: Rest's comment underscores the constraints majority Democrats could face this session given tight margins for both votes and money.

The big picture: State economists have warned that Minnesota's surplus — now pegged at a projected $2.4 billion — could flip to a $2.3 billion "structural imbalance" down the road if lawmakers spend the cash and current spending trends hold.

What she's saying: Rest said that scenario won't occur if lawmakers are fiscally responsible. That's prompted her to tell people coming to her with bill ideas, "No new spending, no new taxes."

  • "You need 34 votes, well you're not going to have 34 votes from Democrats because I'm not going to be voting for big expenditures," Rest said about the support a bill must get to pass the 67-member chamber.

What to expect: Proposals for new taxes will get a hearing in her committee, Rest said, but will be "laid over" for a future session, not set aside for inclusion in a broader tax bill.

The intrigue: Rest, who is known at the Capitol for her direct nature and sharp tongue, said she's "totally disinterested" in being a part of tweaks to a new 50-cent fee on deliveries over $100, which passed as part of a transportation budget bill last year.

  • "I don't support it," she said of the tax, set to take effect in July. "If it doesn't get fixed, it's fine with me. I think it's going to collapse under its own weight."
  • Any changes, she added, would be up to proponents and the Transportation Committee chairs.

The other side: DFL Rep. Erin Koegel, one of the authors of that fee, defended it as a "new and innovative way" of generating more for transportation, arguing that increased volume of deliveries leads to more wear and tear on roads.

  • She expects some technical fixes and clarifying language about how the fees are calculated but said she doesn't see "an appetite to relitigate [the issue] this session" via major changes.

What's next: The session starts on Monday. Minnesota Management and Budget will provide another update on the state's finances later this month.

  • That report, known as the February forecast, will give lawmakers a better sense of the size of the surplus as they consider legislation ahead of the May adjournment deadline.

Get more local stories in your inbox with Axios Twin Cities.

More Twin Cities stories