May 21, 2013 at 2:16 pm
ST. CLOUD, Minn. (KNSI) - After working right up until a midnight deadline, GOP leadership from the house and the senate are now flying around the state, discussing the session's top issues and expressing disapproval with over $2 billion in new taxes signed into law.
House representative Tim O'Driscoll of Sartell was among the 11 lawmakers - including senate minority leader David Hann and house minority leader Kurt Daudt - on hand today at the St. Cloud Regional Airport.
O'Driscoll says the tax increases will be felt by more than just the state's top two percent of earners.
"There's capital investment money that will be taxed for small businesses here in central Minnesota," O'Driscoll says. "We're fortunate to have a lot of entrepeneurs here, but what will happen is that over time, they will silently walk away due to those taxes. We won't necessarily see layoffs, but we'll see people not expanding."
O'Driscoll says one concern is that the increased financial strain on Minnesota businesses will prompt them to expand elsewhere or change their business models.
"The billboards are already up on I-94, saying "Welcome to North Dakota," he says. " This is exactly what we were worried about in January, using Wisconsin as an example. Wisconsin has a campaign as well. These are real concerns; they're not perceived."
However, O'Driscoll says there were a few victories for Republicans.
"Holding off miminum wage, the lack of alcohol taxes - that would have drastically impacted the hospitality industry."
The plan to erase a $627 million deficit includes tax increases on top earners, a raised cigarette tax of 1.60, and doing away with certain corporate tax write offs.
One aspect left out of any tax bills passed this session is a new sales tax on warehousing services. Top Minnesota lawmakers say they purposely delayed the implementation of that tax until next April in case revisions are needed, or the measure should be scrapped altogether by then.
The storage service tax, which doesn't apply to mini-storage rentals, became a clash point in the session's final days. Sales taxes were expanded on other items.
Specific details on what is covered is expected before June 1. Most of the taxes will take effect in July.