New data and opposition to Minnesota Gov. Mark Dayton’s proposed budget might impact his plan to institute a 5.5 percent sales tax on trucking and other services.
The Democratic-Farmer-Labor party governor had proposed cuts to mitigate a $1.1 billion budget deficit forecast in November. Dayton said he will release his revised budget plan March 11 that will be based on more recent numbers.
The initial data he received Feb. 28 indicated good news, Dayton said. “The projected deficit has been lowered by $463 million,” the governor said. “That’s a 42 percent reduction from what was predicted just three months ago.”
Dayton’s sweeping tax reform proposal includes some reductions, such as cutting sales tax rate from 6.875 to 5.5 percent. But that 5.5 percent tax would be implemented on business-to-business services currently exempt from it, which in trucking would tax freight each time it is transported.
A Feb. 27 House tax committee heard five hours of testimony on the plan. Educators and city officials who benefited from the changes spoke in support and businesses that would be hit by the 5.5 percent tax voiced opposition.