Peppin Report: State Numbers Show Spending Outpaces Economic Growth

ST. PAUL—State Rep. Joyce Peppin, R-Rogers, expressed concern with numbers released recently by Minnesota Management and Budget (MMB) that show state spending is outpacing economic growth under the newly-enacted budget passed by the DFL Legislature and signed into law by Gov. Mark Dayton. Under the DFL budget that contained a $2 billion tax increase along with hefty spending increases, state revenue intake came in $2 million below projections for the first quarter, marking a departure from the positive economic recovery Minnesota has experienced over the last two years.

“These numbers appear to confirm what many of us cautioned this spring: growing government and increasing taxes will have negative effects on the economy,” Rep. Peppin said. “Just as our economy was making a steady recovery, the budget and tax increases supported and passed by my Democratic colleagues changed Minnesota’s economic course, causing businesses and consumers to become more cautious and adjust their spending and investment decisions downward. These changes, combined with the upcoming impact of Gov. Dayton’s warehouse tax and health care mandates under the Affordable Care Act, make the road to a healthier economy in Minnesota much more challenging.”

Prior to releasing first quarter budget numbers, MMB certified the results of the 2011 bipartisan budget passed by the Republican-led Legislature. All told, the budget helped generate $3.4 billion in additional revenue, without raising taxes, state budget reserves were refilled and K-12 schools came to rely on a more consistent payment schedule.

Rep. Peppin notes that the current budget and tax bills contain a critical oversight because they fail to comply with federal tax guidelines, meaning Minnesota taxpayers will pay more when they are unable to claim deductions when filing federal returns.

“Families, homeowners, teachers, students, and even food shelf donors stand to lose more of their hard-earned money because of the failure to comply with simple federal tax guidelines,” Rep. Peppin said. “In the end, this mistake creates more work and confusion for taxpayers.”

Rep. Peppin encourages area residents to contact her office with any questions regarding the new budget and changes to the tax code. She can be reached at rep.joyce.peppin@house.mn or 651.296.7806. Mail should be sent to Rep. Joyce Peppin, 281 State Office Building, 100 Martin Luther King Jr. Blvd., St. Paul, MN 55155.