Gunther predicts sales tax repeal

FAIRMONT – State Rep. Bob Gunther, R-Fairmont, believes lawmakers will repeal a set of sales taxes on business services in the upcoming legislative session.

Gov. Mark Dayton supports the repeal, as do Republicans in both the House and Senate. House Democrats likewise are on board. Senate Democrats – or at least their leader, Tom Bakk – appear opposed, but that could be part of a deal-making strategy, Gunther suggests.

A budget surplus that may increase in a report due out Friday would allow the state to trim those select sales taxes, which opponents say hurt Minnesota’s ability to have a competitive business environment and create more jobs.

Gunther also sees a political motivation, at least among some of his House Democratic colleagues. Democrats in swing districts – where either a Republican or Democrat could be elected in November – are wary of the business taxes. Those Democrats also may have supported MNsure, the state’s troubled new health care insurance system that aligns with the federal effort known as Obamacare.

“By trying to repeal [those business taxes], that could go a little way for [the Democrats],” Gunther said. “But unless they actually repeal them, it won’t have an effect that will help them in any way.”

Gunther notes that one of the things Bakk wants is a hike in the minimum wage to $8.50 per hour. This concerns Gunther, because if the federal government does not pass a minimum wage hike, then Minnesota could find itself to be a high-wage island that drives away business.

Gunther notes that about 83,000 Minnesotans work for the minimum wage, with the No. 1 group being waiters and waitresses, who also make tips. He suggests a minimum wage of $7.25 per hour, giving Minnesota the fourth-highest wage in the nation. Then he proposes a guarantee of $12 per hour for those working in bars and restaurants. If their wages and tips do not add up to $12 per hour, business owners would make up the difference.

Another major component of the upcoming session will be the state bonding bill, which goes to maintain buildings owned by the state, including those on college campuses, and to create and improve other state assets.

Gunther sees civic center projects in Rochester, St. Cloud and Mankato as inevitable in the bill. The state’s rationale for being involved is that these are expensive projects that cities cannot afford on their own, that these centers are of regional interest and that there is overlap in uses, such as the Minnesota State-Mankato hockey team playing on the ice at the Mankato Civic Center.

In terms of more local projects, Gunther is pushing for a $675,000 outlay for the city of Truman, for its ongoing storm sewer project, to eliminate flood damage that occurs regularly. He believes the project is likely to be included in the bonding bill.

He also is seeking $500,000 for the Jackson County Library and $700,000 for a new industrial park in Blue Earth.

All of these outlays would require matching funds from local governments.

The toughest thing about the state bonding bill, according to Gunther, is that there is about $1.5 billion more in requests than the state can afford. So each lawmaker knows not every project will get funding, nor can they.

Another priority for Gunther is helping caregivers for the disabled get a 5 percent raise. Since they have not had a raise in so long, the bump will actually amount to less than 1 percent per year, but Gunther says these dedicated workers deserve something.

Finally, he believes school districts across the state can benefit by the state opening up school trust lands in northern Minnesota to nickel and copper mining, something supported by Republicans but that divides Iron Range Democrats from environmentalists. Gunther says granting development of the largest deposit of copper in the world will return billions to the state, allowing it to pass along the windfall to schools. Fairmont’s share could approach $1 million per year, he said.