The tax bills coming out of the House & Senate are certainly something everyone should be paying attention too.  The most interesting aspect of the House bill is that the deduction for mortgage interest is apparently going away. It means adding back the interest you currently deduct from you federal return and taxing it as income.  A very large tax increase for any family.  I think this would have a terrible affect on renters too as interest would have to be passed directly to tenants. 

It has a number of other specific provisions that are of concern to business owners and rural citizens.   It barely passed the DFL controlled house but should not be viewed as "VETO" proof.  Citizens had better let their McCain DFLers/"Rhino" GOPers know how they feel.

The Senate just barley passed its version and they raises taxes on EVERYONE.  The poorest of the poor to the richest of the rich will see substantial increases.  I believe it would put us right back at the top of the most taxed state for the nation.  It also makes us one of the most expensive places in the world to do business.

The other important thing to watch is how our representatives voted against this first round of bills.  The Republicans in both bodies from surrounding districts including Westrom and Ingebrigtsen voted "NO" to the billions of dollars in tax increases.

Otremba (DFL-Long Prairie) and Skogen (DFL-Hewitt) voted "NO", and sided with Republicans for this round. 

The real theater will begin when, and if, an override of a Pawlenty veto is required.   If you remember last year Otremba voted "NO" on the gas tax increase only to turn around a few days later and vote "YES".  I assume this current "NO" was approved by the Twin Cities DFL Leadership.  

With both houses up for re-election next year and combined with the redistricting issue, one can assume these votes can be turned to "YES" when push comes to shove.  We may all feel a little poorer in the end.

Mayor's comment:  The politicians need to not only fix the budget deficit, but have a perspective on where these bills leave us against our competitors.  I worry as a small city mayor about the manufacturing and small businesses in my area. 

If our legislators pass legislation that makes it so expensive to do business in this state it gives the businesses owners I know another reason to take their business somewhere else outside of Minnesota. 

I am also disappointed with the lack of real reform in health and human services and other large areas of our state budget.  If we don't have the political will to make the hard choices now I wonder when we will ever be able to do it?

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