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Yahoo
29-05-2025
- Business
- Yahoo
With no final MN budget deal in sight special session now likely in June
As the Minnesota Legislature blew its deadline to pass a $66 billion budget last week, legislative leaders and Gov. Tim Walz said they hoped lawmakers would return to the Capitol for a special session to enact new state spending by the end of May. That's looking less likely by the day as disagreements over a budget framework deal reached by leadership continue to slow progress. As of Wednesday, lawmakers working in mostly private groups hadn't produced any major public progress on two-thirds of state general fund spending — K-12 education, health and human services. If there isn't a state budget by June 1, thousands of state employees will start getting layoff notices warning of a potential government shutdown on July 1. Lawmakers must pass a budget by the end of June or the government runs out of funding. 'Even though it's slower than we would like, things are going well,' Republican House Speaker Lisa Demuth said at her last availability with the media last Thursday. Nearly a week later, there had been little extra progress. There was hope that there might be some kind of deal by the end of Memorial Day weekend. Now it looks like lawmakers won't return until next week at the earliest. Even if they reached a deal on all budget items on Thursday, final preparations might take at least 24 hours after bills are posted. The governor said he won't call a special session until all legislation is ready to go. There are a few areas of spending the Senate and House passed at the end of session — public safety, agriculture, housing and veterans affairs bills passed. But the biggest parts of the state budget remain unsettled. Deals on taxes, transportation and energy remain elusive as well. A 'global deal' on the budget announced two weeks ago by the Democratic-Farmer-Labor-majority Senate, DFL-GOP tied House and the governor has been troubled by disagreements over finer details. There has also been public opposition to a provision cutting state-funded health care for adults in the U.S. without legal status. DFLers ranging from self-described progressives to moderates say they oppose the change, which Republicans asked for in top-level negotiations. Opponents gathered outside the governor's office in the Capitol to protest the cuts on Tuesday, Forum News Service reported. While they oppose the cuts, Walz, House DFL Leader Melissa Hortman and Senate DFL Majority Leader Erin Murphy have indicated they'll support them in order to prevent interruption of other state services. It's hard to tell how close members are to a deal. Discussions have mostly been happening in private 'working groups' on various budget areas rather than committees. One of the few groups that is public is working on taxes, which has shed some light on the difficulties in the process. Lawmakers working on the taxes bill weren't in complete agreement last week about how the agreement will shape their decision-making. Sen. Ann Rest, DFL-New Hope, said they'd seek further guidance from leaders on how to proceed. And this Tuesday, she showed frustration with House lawmakers who didn't appear to be ready to move forward with their own offer. 'Let it be known to our leaders that the House cannot even accept their own proposal,' said Rest, the Senate Taxes chair, as the committee went into recess. Unique dynamics of co-leaders from both parties in the House working with the DFL majority in the Senate have complicated negotiations. The last time the House was tied was in 1979. Murphy called the House a 'two-headed monster.' Working groups have already passed their leadership-imposed May 21 deadline to finish work on bills, so leaders from both parties said they are getting more closely involved. It's possible they could take control of bills from committee chairs. What Minnesota laws and policies changed after George Floyd? Here are 9 topics Seeking budget deal by end of May, MN lawmakers work Memorial Day weekend Inmate rights groups demand say in Stillwater prison closure plan Matt Ehling: This open-meeting law change is a problem. Undo it, legislators MN Legislature: Budget negotiations go behind closed doors
Yahoo
10-04-2025
- Business
- Yahoo
Proposed tax on social media platforms in Minnesota could raise over $300M
Minnesota legislators are weighing a new tax on social media platforms that could raise $334 million in the next four years as the state faces a multibillion-dollar deficit later this decade and uncertainty surrounding federal funding. Under a proposal introduced by Senate Taxes Committee Chair Ann Rest, DFL-New Hope, large social media platforms like Facebook, Instagram, TikTok and X would pay a tax on the collection of user data, which they sell to advertisers. What lawmakers said is a first-of-its-kind state tax would be based on usership for platforms with 100,000 or more monthly users in Minnesota. It would scale up depending on the number of users on the platform, with the top bracket applying to platforms with 1 million or more users. 'For many years now, social media platforms and businesses have taken our information, our identifying information, and used it to make millions and millions of dollars,' Rest told the Senate Taxes Committee as she presented her bill on Wednesday. 'We hope we can modernize the way in which our tax systems work, recognizing the world has greatly changed.' If the new social media tax were to take effect as a part of this year's two-year state budget, it would raise about $46 million in its first year. That amount is expected to grow to more than $90 million annually in the following three years, according to an analysis by the Minnesota Department of Revenue. The Senate and House tax committees heard versions of the bill Wednesday and held it over for possible inclusion in a larger tax package bill later in the session. It could face a tough path forward in the House, where Republicans and Democrats both have 67 seats. GOP lawmakers say the state shouldn't pass any new taxes and should focus on rolling back the large expansion of spending that happened under Democratic-Farmer-Labor controlled government in 2023. Rest and other supporters who testified in favor of the new tax said it would ensure that large companies profiting off user data — which they get by providing otherwise free services — are paying their fair share in Minnesota. 'This bill proceeds from the very reasonable premise that this extraction of value should be taxed the way the extraction of many other valuable natural resources are taxed,' said University of California — Davis law professor Darien Shanske, whose work focuses on state and local tax policy. Economic disruptions and federal budget cuts caused by President Donald Trump also could mean more stress on state resources in the months and years ahead, supporters said. 'This bill is badly needed because it provides revenue that could be used to help those that will be hurt if the social safety net is shredded,' said Phillip Sandro, a retiree with health issues living on a fixed income who spoke for the progressive faith group Isaiah. Supporters also argued that negative social consequences from social media platforms, such as potential harm to younger users' mental health, warrant taxation because of the cost they pose to society. Politicians have targeted companies like Facebook parent Meta in recent years after studies showed that excessive teen social media use was tied to psychological distress. Minnesota is set to have a $456 million budget surplus in 2026-2027, but as lawmakers put together a two-year state budget this spring, a $6 billion deficit looms in the following 2028-2029 fiscal year. Early proposals from the Governor's Office, House and Senate have largely centered around billions in cuts, but Democratic-Farmer-Labor senators and representatives have left new taxes on the table. Republican Senators questioned the need for any new taxes when the state grew spending by 40% in the last budget passed in 2023, which saw state spending top $70 billion and used most of a record $18 billion budget surplus. 'The reason why the state of Minnesota is facing a $6 billion structural deficit is because of the overspending, the unsustainable spending over the last two years,' said Sen. Jeremy Miller, R-Winona. 'When you spend more than the revenue coming in, it's unsustainable; it's simple math.' Opponents also said a tax on social media platforms will hurt small businesses in the state who rely on targeted advertising to reach local and regional customers. New social media taxes would mean big companies would pass the cost along to smaller business customers, argued it would limit access to targeted ads. 'Minnesota's consumers, small businesses, retailers, family farms and even newspapers that would feel this squeeze,' said Deb Peters, a lobbyist with Americans for Digital Opportunity and the Association of National Advertisers. 'Taxing advertising, especially online, raises prices for everyone.' Business interests also noted that passing a law targeting social media with a new tax could attract legal action. The Internet Tax Freedom Act, originally passed in 1998, protects online businesses from state and local government taxes that apply only to digital commerce, wrote the Midwest branch of TechNet, a group representing technology executives. New MN office for missing, murdered Black women and girls aims to build awareness MN House bill aims to assist families with child care costs Push to release Sen. Nicole Mitchell arrest video gets new chance on appeal St. Paul nonprofit pays $7.3M to turn Bandana Square hotel into emergency shelter Minnesota health department cuts 170 jobs after federal COVID grant freeze
Yahoo
03-04-2025
- Business
- Yahoo
Minnesota Senate Democrats propose new tax on social media companies
A view of the Capitol dome on March 6, 2025. Photo by A.J. Olmscheid/Senate Media Services. Minnesota Senate Democrats are proposing a first-in-the-nation tax on large social media companies that collect data on Minnesota consumers. The bill, chief authored by Senate Taxes Committee Chair Sen. Ann Rest, DFL-New Hope, would impose a tax on social media companies based on the number of monthly active Minnesota consumers from whom the company collects data. Minnesota is facing a looming multi-billion dollar budget deficit, and lawmakers are working to cut spending and generate new revenue to offset the imbalance. In an interview, Rest said taxing social media companies is a solution that doesn't hurt Minnesotans — it doesn't cut critical social services or increase their taxes. 'We know we're going to see some cuts, but I also felt it was my job to look for some fair ways to provide the revenue,' Rest said. 'We're talking about folks like Elon Musk and Mark Zuckerberg. We've been giving to them for years and years, and now we're going to ask those social media businesses to participate in solving Minnesota's budget challenges.' Under the bill (SF 3197), if a social media company has fewer than 100,000 monthly consumers from Minnesota, it wouldn't be taxed. If the social media company has between 500,000 and 1 million Minnesota consumers, the tax per month would be $40,000 plus 25 cents times the number of consumers over 500,000. For the largest social media companies — those that have over 1 million Minnesota consumers — the tax per month would be $165,000 plus 50 cents times the number of consumers over 1 million. The Department of Revenue estimates that the tax would apply to 15 social media companies. The tax, which would begin in January 2026, would generate around $46 million in the first fiscal year, $92 million in the second and about $100 million annually after that. Meta, the parent company of Facebook, reported $62 billion in profit in 2024, on $164 billion in revenue. Even as the companies make hundreds of billions of profit, social scientists are sounding the alarm on the widespread use of the apps, especially by young people. Republicans this year have said that they will not support any new taxes on Minnesotans, so lawmakers have been looking for areas to cut spending. When asked whether House Republicans would support a tax on social media companies, a spokesperson said no. 'Our position is no tax increases,' a House GOP caucus spokesperson said. New York since 2021 has proposed taxing social media companies for data collection, or data mining, and a similar bill is again being considered by the New York Legislature this year. Rest said that she hopes Minnesota's legislation can be regarded as a model for other states that are experiencing budget shortfalls. The bill will be heard in the Senate Taxes Committee on Wednesday, and Rest said House Taxes co-chair Rep. Aisha Gomez, DFL-Minneapolis, will be introducing the House version soon.
