Legislators finally reached an agreement on a $52 billion two-year budget on June 30th
Legislators finally reached an agreement on a $52 billion two-year budget on June 30th, the day before a government shutdown would start. They adjourned soon after. Below is an update on issues of importance to small business.
Minnesota Finally Passes PPP Loan Forgiveness!
On the last day before a state government shutdown would occur, June 30th, the House and the Senate finally acted on important PPP loan conformity legislation. Governor Walz signed it into law. NFIB strongly supported this legislation and co-led the coalition that was successful in passing it. The bill fully conforms to the federal law for PPP loan forgiveness and deductibility. It also included other forgiveness for EIDL loans and SBA grants.
Small Business Property Tax Cut
The bill also contains an important small business property tax cut that will be especially helpful for small businesses with lower taxable market values. The legislation increases the exemption for the state general property tax from the first $100,000 in value to $150,000, and businesses with a market value of $150,000 or less will not pay the state general. The state general tax accounts for 20 to 30% of your property taxes.
Walz’s Emergency Authority Ends July 1st
In a surprise move, after receiving a lot of pressure from the legislature, Governor Walz agreed to end his coronavirus peacetime emergency authority July 1st. The Governor had planned on ending the authority on August 1st, but was under a lot of pressure from legislative Republicans. Even the Democrat-controlled House voted to end his authority. As it turned out, the Governor made this announcement just prior to the House vote. The Senate again quickly approved ending the authority. This puts an end to an extraordinary period in Minnesota history where the Governor had undue powers to mandate state regulations regarding all pandemic-related efforts.
Critical Reinsurance Program Retained
Despite efforts by Governor Walz and the House DFL caucus to end this critical and successful program, NFIB was successful in helping retain the program for one more year. Proponents wanted to end the program one year early and apply the budgeted money to other spending. They planned on having individuals who have benefited from this program in the state’s individual health insurance market utilize the federal tax credits that are available temporarily through 2022. It is estimated that close to 50,000 Minnesotans may not be able to benefit from these tax credits and insurers estimate this would cause a large 25% across-the-board increase for everyone in this market. Fortunately, the Senate majority Republican caucus stood strong and insisted on funding for this program through 2022. The legislation also authorizes another federal waiver to be requested to continue the program.
NFIB strongly supported retaining this successful program that not only stabilized the Minnesota individual insurance market during the 2017 crisis, but also reduced premiums by about 20% on average. Fortunately, the program will be retained through 2022.
COVID Liability Protection Bill Stalls
The COVID liability protection bill for business strongly supported by NFIB was a bill that did not advance due to Minnesota’s divided government. The Senate developed a very favorable bill with input from NFIB and others and did pass it to the floor, but the leadership could not find a viable path for passing it in the House due to strong opposition. The bill was authored by our good friend, Senator Warren Limmer (Maple Grove), who chairs the Judiciary Committee. When the bill was heard in committee, NFIB member Mike Flynn, who owns Amish Market in Saint Charles, along with NFIB State Director in Minnestoa, Mike Hickey, testified for the bill, citing the need to protect small businesses from meritless COVID related lawsuits.
Several bills proposed by the Democrat House majority and supported by the Walz administration fortunately never crossed the finish line, thanks to strong opposition by the Republican-controlled Senate during the 2021 session. NFIB strongly opposed or raised concerns about the following:
- A new sky-high 11.15% top income tax rate for joint filers earning more than $1 million and single filers earning over $500,000. This would have given Minnesota the second highest rate in the country behind California.
- A billion-dollar paid family leave program that would have imposed a new tax on every employer and employee in the state to finance it.
- A mandated paid sick leave requirement with no exemption for even the smallest businesses.
- Stringent new pregnancy accommodations that repealed Minnesota’s small business exemption of 20 or less that could have required employers in some cases to hire replacement workers while the pregnant employee remains at work.
- Legislation prohibiting employers from asking an applicant about their current or past salary.
- Unfortunately, a bad provision allowing high school workers to collect unemployment insurance benefits did pass and it goes into effect on July 3rd of 2022. NFIB opposed this provision.