By Brian Rosemeyer
Sun sailor Newspapers
The TwinWest Chamber of Commerce got a glimpse of the next few months in St. Paul, and it’s clear there is some heavy bipartisan lifting ahead.
Leaders of the Minnesota House and Senate shared their take on various issues facing government at the chamber’s monthly Legislative Breakfast Jan. 11 at the Doubletree Minneapolis Park Place in St. Louis Park.
Questions were posed to panelists House Speaker Paul Thissen, House Minority Leader Kurt Daugt, Senate Majority Leader Tom Bakk and Senate Minority Leader David Hann, touching on tax reform and the proposed health care exchange.
Health Care Exchange
The legislative leaders were divided on the state’s work to implement a state-run health care exchange before the federal government would step in an impose one in late March.
A health exchange basically a website from which Minnesotans could purchase subsidized health care. It would act as a marketing tool for health insurance and, some were concerned, it could take revenue from independent sales agents.
Bakk supported drafting an exchange and announced that in the senate that it was priority number one.
“We can do a better job in Minnesota than the federal government with our health care exchange,” Bakk said. “I don’t have a clue what [the federal government] is doing out there. I don’t trust them to do it.”
Hann said he saw problems ahead, including an increase in premium costs and a 3.5 percent tax on users to pay to operate an exchange.
“It always is curious to me when I hear people talk about their desire to have the state run the exchange because we don’t trust the federal government,” Hann said. “But it’s okay to let the federal government run the whole health care system? I don’t understand that.”
He continued to say that there already exists a marketing tool for health care that works: independent insurance agents. He said it was unclear how building an exchange could reduce cost and make things better for health care in Minnesota.
“There’s some real challenges in this bill,” Hann said. “And if we’re going to do it, there has to be some strong assurances that we’re not going to destroy the private health care system in this state.”
Thissen offered projections showing that health care premiums for small business will go down with the exchange. He said the current health care system doesn’t work, and something needs to be done.
“One of the things that the health care exchange would do, and we can’t forget this, is that it’s going to insure another 300,000 people,” said Thissen. “That’s not just an economic issue, that’s a moral issue.”
Hann clarified that he recognizes something needs to be done, but disagreed on the “how.”
The panelists were also asked to share their input on Gov. Mark Dayton’s desire to increase taxes on high-income earners in Minnesota, and what the state can do to cover revenue shortfalls in the coming years.
Thissen spoke to the state’s more than $1 billion deficit, and the large amount of money that Minnesota has borrowed from its schools. He said the tax system needed reform, and that the burden has to be shifted from the middle class.
“At the end of the day, it seems to me that we ultimately want to make sure our tax system and the burden of the state budget doesn’t fall on our middle class families,” said Thissen. “And it has in the last 10 years or more.”
He said the goal should be to create a fair and healthy tax system.
Daugt commented that, when considering reform, legislators need to look at how changes will impact the already struggling economy. He suggested that policy change that promotes a stronger economic climate helps raise revenue more than simply increasing taxes.
“Revenues are coming in higher that expected not because we increased taxes, but because the economy is growing,” said Daugt. “That’s a better way to increase revenues than increasing taxes. The economy is heading in the right direction, we need to make sure we don’t drive it off the tracks.”
“If you are always managing a crisis, you cannot make good decisions about the future,” said Bakk. “And you never have any money to invest in things that are important.”
Bakk suggested reforms such as lowering the corporate tax rate, and noted that higher income earners can expect to see an increase.
He also said that part of the tax burden problem is that state government doesn’t build strong enough relationships with local bodies of government such as cities and schools, where many services are administered.
“I think we are given an over-reliance on property taxes,” he said. “Part of the reason that has happened is because the state haven’t been a strong enough partners with local bodies of government.”
Contact Brian Rosemeyer at [email protected]