ST. PAUL — Minnesota Gov. Tim Walz on Wednesday, April 20, criticized leaders of the divided legislature for failing to reach an agreement to reimburse the state’s unemployment insurance fund and to send checks to workers frontline workers who have stayed at work during the pandemic and he urged them to resume negotiations.
In March, lawmakers missed a deadline to repay the federal government $1 billion for sending resources from Minnesota to help those who were out of work during the pandemic. They also disagreed on how much the state should spend to replenish the unemployment fund. That triggered double-digit rate increases for some Minnesota businesses.
Those who have not yet paid will see taxes come due at the end of April. That is unless the legislature can step in and replenish the fund to block rising taxes.
With a budget surplus of $9.25 billion, repaying the fund and tackling other major issues like sending direct payments to Minnesotans, frontline workers’ compensation, and increasing public safety funding should be easy, Walz told reporters on Wednesday. At an independent press conference, the first-term governor said it was “absolutely ridiculous” that the Legislature had yet to resolve the unemployment fund issue and urged lawmakers to conclude quickly a deal.
“The pace of meetings and the pace of work need to pick up,” Walz told reporters at a Minneapolis grocery store. He was there to outline his plan to send $500 payments to Minnesotans who earn below a certain income threshold. “This should have been the easiest deal in Minnesota political history.”
In February, the Senate advanced a $2.7 billion plan to repay the federal government the $1 billion and replenish the fund to prevent a tax hike for Minnesota employers. Walz also supported this plan. But the House hit back with a cheaper proposal that would reimburse the federal government but not fully replenish the state fund.
Democrats who control the Minnesota House have said they would support the plan to replenish the fund for the unemployed, but only if it is accompanied by a billion-dollar plan to send checks for $1,500 to the frontline workers who stayed on the job during the pandemic. Senate leaders said they were not interested in the plan.
The standoff has frustrated business owners, some of whom have automatic payment systems that have already paid the higher tax rates. Dozens of business leaders from across the state gathered at the Capitol on Wednesday to share their stories with lawmakers and urge them to replenish the fund before the April 30 deadline.
“We call on the governor and legislative leaders and all bodies of both parties to come together to address this issue immediately,” Minnesota Chamber of Commerce President and CEO Doug Loon told reporters. “Minnesota is an outlier. The state needs to be competitive. If we don’t fix that, Minnesota businesses will be at a disadvantage.”
Frank Soukup, marketing manager for Grand View Lodge in Nisswa, Minnesota, said the tax hike represents an increase of about 15% for the resort, which employs 850 people during the summer months. And it dealt a blow to an industry already hard hit by the COVID-19 pandemic.
“The hospitality industry has been devastated over the last couple of years with hotels and restaurants and everything, so anything we can do to help those sectors get back on track will help everyone help out. I mean, c There are a lot of jobs in our local community,” Soukup said.
Walz said he plans to share a compromise proposal during his state of the state address on Sunday, April 24, which he says could appease both sides of the divided Statehouse. House Speaker Melissa Hortman, DFL-Brooklyn Park, and Senate Majority Leader Jeremy Miller, R-Winona, told Minnesota Public Radio on Tuesday they believe negotiations will continue later. this week.
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