When District 9 Minnesota Sen. Jordan Rasmusson headed to the state Capitol for the 2023 session, he knew he would face a challenge in getting laws passed to benefit his constituents and rural Minnesota.
Senate District 9 includes Otter Tail, Wilkin, Traverse, and Grant counties, along with the western half of Douglas County.
As a Republican, he would be in the minority party.
The Democratic-Farmer-Labor (DFL) Party controlled the House with 70 members to the 64 seats held by Republicans. In the Senate, the DFL had just a one-seat majority, 34 to 33. Also, Minnesota’s Gov. Tim Walz is a member of the DFL Party.
With complete control of the legislative and executive power in St. Paul, Democrats set the agenda, controlled the chairmanships, and the legislation that moved on for the governor’s signature to become law.
To give an idea of how the DFL control leaves rural Minnesota outside the legislative power structure, consider these facts from MinnPost: In total, 12 of 70 House Democrats are from Greater Minnesota, as are six of 34 Senate DFLers. Greater Minnesota makes up about 45% of the state’s population.
Despite his position in the minority during the 2023 session, Rasmusson feels he was able to get still a lot accomplished. He served on the Commerce and Consumer Protection Committee, the Human Services Committee, and the Pension Commission. At the same time, the DFL control let its members dictate what happened during the 2023 session unchecked.
“I was very disappointed that we had single-party control down at the state Capitol,” Rasmusson said in an interview with the Herald last week. “There were a lot of consequences of that, but one of the biggest ones I saw was the budget.
“It was a budget year, a budget session. We started with about an $18 billion surplus, and I think many Minnesotans, especially folks in this area, expected to see some kind of tax relief. They ended up burning through that surplus, increasing taxes about $9 billion, and that was to fund about a 38% increase in state government spending.”
The 2022-23 state budget was the last fiscal year’s budget, which ended June 30, was $51.6 billion over two years. The budget adopted for the current biennium was about $71.5 billion. It will drop back to $66.1 billion for the biennium that starts July 1, 2025.
The decline reflects how much of this upcoming two-year budget is one-time spending, as much of the surplus is one-time money made possible in part by an infusion of federal cash into the state during the pandemic.
The DFL-controlled Legislature approved one-time rebates of $260 for individuals and $520 for married couples. An extra $260 was added for every child, with a $1,300 maximum. In all, the rebates spend $1.15 billion of the surplus.
“It was tough for me and the Republican Party to get the tax relief that a lot of us had campaigned on. That being said, I am still someone who shows up, rolls up his sleeves, and sees what he can do to advance the ball on the things that are important to me,” Rasmusson said.
Rasmusson says he was the chief author of 44 bills in the last legislative session, 21 of which became law in some form.
He got several bills passed that he saw as key to saving taxpayers money. One was getting the minimum markup law on gasoline eliminated.
Under the markup law, Minnesota required gas sellers to add either the lesser of 8 cents or 6% to the wholesale price of the gallon of gas. It was an old law meant to protect small and new station owners from chain predatory pricing. It was seen as no longer necessary.
There was also a law that prohibited below cost sales of dairy product such as yogurt, milk, and cottage cheese. Rasmusson worked with consumer advocates and dairy farmers to get that law repealed.
He worked on reducing the investment return assumption from 7.5% to 7% for major statewide public pension plans. He also argued that paying down the state’s unfunded liabilities with the state’s surplus funds saves future interest costs. Between them, they would save Minnesotans $600,000 million in coming years.
Rasmusson also served on the House-Senate conference committee that agreed to provide $300 million to the state’s nursing homes. “My job on that was to figure out the details and get the bill ready for passage,” he said. “And it passed unanimously in both chambers.”
This funding will be essential to keep rural Minnesota nursing homes open where the closure or reduction in beds has a greater impact. In the Twin Cities, a person might have to move a few miles away to another facility if the one they are living in closes. In rural Minnesota, it can mean moving 50 miles or more away from family and friends for a person who has lived their entire life in a community.
The average nursing home will be an increase in funding of about $1.1 million that will help them pay off debt and to pay their workers more, Rasmusson said. There is also a provision for up to $3,000 per worker per year in workforce incentives ranging from daycare expenses, transportation, employee contributions to a 410k, and retention bonuses.
Going into the 2023 legislative session, Rasmusson said he would seek to provide $10 million in grants for childcare facilities in Greater Minnesota. He was also hoping that some of the regulatory mandates from the state for home-based childcare providers could be eased.
Minnesota has higher child care costs than its peer states because of the burdensome regulation pushing services away from homes and into regulated centers, he said.
Some one-time grant money is coming to help small towns like Battle Lake and Perham finance the opening of a childcare center that is also supported by the community. However, no larger bill to support childcare efforts passed.
While he was hoping to see an easing of regulations on building to reduce construction costs, however, those efforts were frustrated as energy-saving and carbon emission goals supported by Democrats took precedence.
Tax on social security
Rasmusson feels that members of the DFL Party did not live up to the promise to eliminate the state’s tax on Social Security income for all recipients.
Married filers with a federally adjusted gross income below $100,000 will no longer pay taxes on their Social Security income. Those making over $100,000 will see a phased income tax that stops at $140,000. Individuals earning up to $78,000 won’t have to pay Social Security taxes.
Only 25% of Minnesotans are now paying taxes on their Social Security income – that is still too many, he says.
Minnesota is only one of 11 states that taxes Social Security income, it makes the state an outlier, Rasmusson said.
“I talk to folks who don’t even pay the Social Security tax, and for them, it is a fairness issue,” he said. “I have already paid taxes on this. Why is the state going after it?” they ask.
“I think, especially in our area, we face competitive pressures from North Dakota and South Dakota. Unfortunately, we have many folks who make sure they spend six months and a day in another state (to establish residency in that state where the taxes are lower.) I think this is a case where we are chasing capital, we are chasing people, chasing families, chasing businesses out of state when we should be doing as much as we can to attract people.
“Especially when we started with an $18 billion surplus, and this was a priority many Democrats campaigned on,” he said. They said they were committed to getting rid of the Social Security tax. “It is really disappointing we weren’t able to get the whole thing done.”
Rural law enforcement $300 million/cannabis
Rasmusson supported providing more funding to law enforcement but feels the passage of a law legalizing recreational marijuana use will complicate their jobs.
Legislators approved $300 million in public safety aid for local governments. The funding was a priority for the DFL Gov. Walz and had strong bipartisan support.
“I served on the conference committee on the legislation that legalized recreational cannabis. Of the 10 members on the committee, I was the only person who voted against the bill,” Rasmusson said.
“One of my priorities was working with the law enforcement community to try to make sure they get the resources to address some of the issues that will develop. We were able to get $5 million a year for drug recognition expert training. That is really important to law enforcement agencies, like our Grant County Sheriff’s Office, because frankly a lot of the people who have the expertise are in the state patrol, or in the larger metro agencies.
“That was really a need I heard from our local sheriffs and police chiefs who said if this is going legal, we are going to see it on the roadways, we need to make sure that we have officers that are trained to say, ‘You are driving under the influence of cannabis. You are breaking the law.’”
With cannabis, there are no field testing devices like there is for alcohol, he said.
Rasmusson wants a cannabis fix bill passed in the 2024 legislative session.
The desire to pass the bill meant it wasn’t as thoroughly thought out as it should be. Legalization of its use before rules for its sales are in place is a major problem, which could lead to the development of a black market in cannabis products. He sees portions of the bill are complex and contradictory in places.
Minnesota is one of the few states that allows cannabis smoking in many public places unless prohibited by municipal or county ordinances. It should be the other way around, where it uses is okay in public spaces only if specifically allowed by local laws.
One of the most frequent questions Rasmusson gets asked when giving legislative updates to cities and counties is, “What does this mean for us?”
False or deceptive packaging needs to be addressed as well. He told of how General Mills had told him that its Trix cereal logo look is being used on cannabis packaging. It is being manufactured in China, then shipped to the U.S.
“We need some mechanism to go after cannabis packaging targeting kids,” Rasmusson said.
Helping and hurting
A lot of the superintendents that Rasmusson has talked with since the session ended have acknowledged they got a good funding increase from the Legislature. However, they have new expensive mandates like unemployment insurance for their part-time employees. This includes bus drivers, paraprofessionals, and kitchen staff.
For example, those who argued for the unemployment for bus drivers said it would help the school districts hire and retain drivers. Currently, school districts face a shortage of drivers, meaning longer routes with kids riding one way for more than an hour sometimes.
From what he has heard, because drivers are getting unemployment payments, school districts have to hire additional drivers to fill in for summertime bus needs. “It is unfair to call some back and let others sit with their unemployment,” he said.
It also means those school staff who might have filled seasonal jobs in the community during the summer are now on the sidelines collecting their unemployment.
It is not necessarily bad that these people are getting unemployment, but is it worth increasing the taxes on the state’s residents and businesses when Minnesota is already a high-tax state? he asked.
Minnesota has a lot it can do to improve the economic vitality and the state’s growth, Rasmusson said.