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.
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