January 27, 2023
Advertisements

What’s in a name? For tax credit checks, which a guy named Walz dubbed “Walz Checks,” that name was a death sentence.

Not yet.

Advertisements

Before the 2022 legislative session, and after visiting the Minneapolis Community and Technical College to highlight its economic development package, the DFL governor expressed his support for what he called “roll checks.”

Recalling the “Jesse Checks” that former Gov. Jesse Ventura introduced two decades ago, the DFL governor proposed using part of the then-record budget surplus to pay taxpayer rebates.

Article continues after advertisement

It wasn’t shocking that Republicans in the legislature, especially those who controlled the Senate, didn’t care about the idea or the name. It was an election year, and the Republicans were unlikely to let the DFL governor send money to voters while they were considering his re-election. There was also some overconfidence in the game as the Republicans thought they would make all the decisions after the 2022 election and didn’t need to give the DFLs any tax cut glory.

Advertisements

State Representative Lisa Demuth

A year later, with that election yielding a different result than Republicans expected, an idea that the previous House GOP leader called “election year desperation” is now what the new House GOP leader calls a good idea. Because much of the current $17.6 billion surplus has remained in the current budget and is not expected to be maintained in the next, Rep. Lisa Demuth of R-Cold Spring said the use should also be one-off.

“This is a one-time money, so you should consider possible one-time rebates for our tax declarers,” she said. “This is a discussion that we would like to have as a caucus.”

Earlier this month, upon learning of a new record surplus, Waltz renewed his backing for discounts, something he has never backed down from.

Advertisements

“It’s no secret that both chambers and bipartisans took it cool,” Waltz said. “But if you want to cut costs in the short term and make an impact on families who really need it, this is one of the most effective ways.

“We will offer it again,” Walz said. If legislators acted quickly, perhaps combining rebates with a regular state tax reconciliation act with federal tax changes, they could easily be mixed with state income tax returns and refunds.

The Legislature did not react quickly on most issues when the House of Representatives was under the control of the DFL and the Senate was under the control of the Republican Party. All issues were linked and all were possible bargaining levers. With the so-called DFL troika, in which the party controls all three parts of the legislative process, early action is more likely, though not guaranteed. There is no consensus on discounts or refund details.

Advertisements

DFL lawmakers opted for targeted tax cuts aimed at low-income Minnesotans, families, and students. The checks didn’t ring the bells. In June, with little chance of a bipartisan tax-and-spending deal being approved and with elections in mind, House Speaker Melissa Hortman came to her senses. To put political pressure on the Senate, she and Waltz approved a special session to issue checks, which have now risen from $350 per pair to $2,000, with the price increased from $700,000 to $4 billion.

Offering checks to voters/taxpayers was good policy. This poll is exceptionally good. It also gave the DFLs something to say when there was high pressure on the track, especially at the gas station.

Article continues after advertisement

“It’s bad faith to charge $7 billion when the people of Minnesota are trying to pay those bills,” Waltz said. Hortman added, “Minnesotans are suffering and we must take action to help them.”

House Speaker Melissa Hortman

MinnPost photo by Peter Callaghan

House Speaker Melissa Hortman

How did she explain her change of heart, if not a political campaign? Hortman said that inflation has persisted longer than economists had predicted.

Discount checks, waltz checks, whatever they are called, have more life than ever. With the 2023 session only weeks away and the surplus now at $17.6 billion, $4 billion doesn’t seem like as much money as it did last spring. The new surplus includes about $11.5 billion, reflecting past economic activity and tax collections, and is not expected to continue into the future. This forces politicians to propose one-time spending rather than funding a program that obliges the government to keep spending in the next budget and the next.

Checks are ideal for one-time expenses. And 4 billion dollars is the cost for the program where checks stop at single tax filers with incomes up to $164,000 a year and married couples with incomes up to $273,470 a year. Drop those hats and the price tag will drop. Walz said he is open to a lower qualifying income level.

At least eight states have given taxpayer rebates by the middle of summer, not as generous as Waltz’s offer. They range from $75 in Idaho to $850 in Maine.

Walz rationalized the name of the checks as “Walz Checks”, referring to a similar name when they were proposed by former Governor Jesse Ventura. But “Jesse Checks” 1999–2001 were dubbed by legislative observers and residents, not Ventura.

Call them whatever you want, Waltz said when he was called. “Nobody out there knows what they’re called, they just want them in their pocket.” During the summer, when gas prices hovered around $5 a gallon, Walz said, “I’ll tell you what the people of Minnesota are going to call them, they’re going to call them gas checks, because that’s how they’re going to use them.”

Just don’t call them stimulus checks, as they did when they emerged from the Congressional response to the pandemic in 2020 and 2021. Just in case, checks are not called incentive checks. Unlike the series of checks that flowed from federal pandemic aid in 2020 and 2021, the waltz checks should not stimulate an economy that remains overstimulated, according to the Federal Reserve.

“Discount checks will definitely impact the Minnesota economy as households spend money, but it won’t affect national inflation trends,” he wrote. Louis Johnston, Professor of Economics at St. John’s University and St. Benedict’s College. Johnston concluded on the impact of returning all of the government’s surplus to taxpayers.

Article continues after advertisement

“Total U.S. household spending in 2021 was about $16 trillion, or $17.6 billion, up from $16 billion. This is about 0.1% of the US economy, and not enough to affect spending and inflation,” he said.

#guerrilla #stalemate #died #chances #rolling #checks #good

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *