Tax season is just around the corner, but small businesses and people in need of pandemic unemployment insurance are suddenly facing big surprise taxes. The federal government has exempted this COVID emergency aid from taxes, but Governor Tim Walz and the House have resisted efforts to get it exempt from state taxes as well.
The Senate passed bipartisan bill to protect these companies and workers from big tax hikes, but the House Democrats disappointedly blocked it.
We have to do this. These companies and workers obeyed the rules and did everything possible to survive the pandemic and Governor Walz’s business closings. You’ve endured it enough times. Because our national budget is so good, we have an easy opportunity to help these companies and workers find relief.
Our calculation had two main components:
It protects businesses by exempting Federal Paycheck Protection Program (PPP) loans from state taxes. These emergency loans, which were granted by the federal government last year to help businesses struggling to survive the COVID-19 pandemic, are not subject to federal taxes. The Senate bill would bring Minnesota’s tax laws into line with federal regulations.
It allows Minnesotans who have received additional COVID unemployment benefits from the federal government to deduct some of those benefits from their income taxes this year. Many people were surprised by the high tax burden because the state did not withhold taxes on these payments.
Now it’s up to the house and Governor Walz. I encourage everyone to reach out to Governor and Spokeswoman Melissa Hortman and ask her to take advantage of this urgent tax break. You shouldn’t be doing politics on these people’s livelihoods.
A more collaborative approach to future emergencies
One of the most popular topics I hear from constituents is Governor Walz’s emergency orders. People are rightly frustrated with the governor’s standalone approach and want the governor and lawmaker to work together on the state’s response. I agree.
On several occasions, including as recently as March 18, the Senate has voted to end the emergency powers. Unfortunately that will never happen as long as the Democrats control the House of Representatives. This is because the current law allows the governor to indefinitely extend a peace emergency for 30 days at a time, and only allows lawmakers to revoke emergency powers if both the House and Senate vote to do so.
We’ll keep trying, but we’re also taking steps to avoid this situation in the future. The Senate recently passed laws aimed at restoring a fair balance of governance between the legislature and the executive in future states of emergency. The bill would require the governor to seek legislative approval to extend an emergency statement beyond 30 days. It received support from Republicans, Democrats, and Independents.
Government works best when everyone works together. In the course of the pandemic, Governor Walz made decision after decision all by himself, without cooperating with the legislature. Business closures. School closings. Restrictions on what you can do in your own home. Pandemic or not, these decisions are far too important to be made by one person. Legislators must have a seat at the table regardless of party if we ever find ourselves in this situation in the future.
If you have any questions about these bills or any other issue the legislature is working on, you can always contact me at email@example.com or 651-296-0284. It is a privilege to serve you!
John Jasinski, R-Faribault, represents District 24 in the Minnesota Senate.