The Minnesota State Legislature last month concluded its 2023 session, passing the largest spending budget in the state’s history, amounting to $72 billion.
To provide context, this figure represents a 32% increase compared to the $53.3 billion allocated in the 2022-2023 budget. According to the state Senate’s Annual Fiscal Review report, state expenditures have grown by an average of 2.3% per year over the past 20 years, based on the $33.6 billion spent in the 2002-2003 biennium.
As Minnesota contemplates the significance of this fiscal milestone, perspectives from the three legislators representing Eden Prairie provide insights into the events and rationales that influenced these developments.
During the recent session, all three — Sen. Steve Cwodzinski, and Reps. Laurie Pryor and Carlie Kotyza-Witthuhn — acknowledged the substantial increase in the approved budget. When questioned about the sustainability of such increases in future bienniums, each expressed confidence.
Cwodzinski (DFL-49, Eden Prairie), citing future projections provided to the Legislature by Minnesota’s Office of Management & Budget, expressed faith in their work, stating, “I have faith in their work. Based on their forecasts, we should be good for the next four years.”
Kotyza-Witthuhn (DFL-49B, Eden Prairie), whose district is primarily located in the southern part of Eden Prairie, referred to guidance from the Legislature’s committee chairs, which she described as “judicious.”
All three representatives acknowledged the importance of avoiding future budget deficits.
“I believe that we are structurally balanced,” said Pryor (DFL-49A, Minnetonka), whose district represents northern Eden Prairie as well as southern Minnetonka. “Revenues should match expenditures. No tax rate increases are expected.”
That said, Pryor acknowledged that the state’s gas tax will increase, now indexed to inflation, due to legislation approved this past session. Kotyza-Witthuhn said that “we’re in a really good place. The state’s rainy day fund is well funded.”
It was also acknowledged that the size of the increase in the new budget would have been less had it not been for the historic size of the state’s $17.5 billion budget surplus, of which anywhere from $9 billion to $12 billion was used in the new budget, according to Cwodzinski and Pryor. These funds were used for one-time investments in such items as affordable housing and lead pipe removal.
A lot of discussion during the past session, particularly from the Republican side of the aisle, centered on tax cuts
With regard to the budget surplus, a majority of Republican House and Senate members argued for returning more of the surplus to Minnesotans in the form of rebates and rate cuts. Specifically, they advocated for the elimination of income tax on Social Security income. Ultimately, the Legislature approved a tax cut for that specific tax affecting 76% of all Social Security recipients.
“I was surprised at what the Legislature came up with,” Cwodzinski said. “I expected more.”
Pryor and Kotyza-Witthuhn pointed out that, while tax cuts were approved, they were implemented in a more targeted manner, specifically benefiting many of the state’s frontline workers who they described as being left behind during the post-pandemic recovery. Additionally, a significant portion of the approved tax cuts were aimed at reducing childhood poverty. They considered this an investment in ensuring that today’s children will be better able to participate in the future workforce needed by Minnesota.
As for tax cuts in future legislative sessions, Cwodzinski, Pryor, and Kotyza-Witthuhn agreed that they should be considered, provided the state’s economy continues growing. All three acknowledged that the tax on Social Security income will be a topic of discussion in the next session and expressed their openness to reconsidering it.
With the new state spending, all three representatives will be watching for specific outcomes to justify what was spent.
For Kotyza-Witthuhn, she will be focused on encouraging greater parental participation in early childhood and family education (ECFE) classrooms. She anticipates that this will drive more innovation in classroom instruction and enable better targeting of the needs of young students.
Cwodzinski believes that the newly introduced unemployment insurance benefits for bus drivers, kitchen staff, and janitorial staff will play a crucial role in improving recruitment and retention numbers. This, in turn, can help address the ongoing worker shortage experienced by school districts. Previously, many workers in these positions faced the need to seek alternative employment during the summer months, often resulting in a permanent departure from school district employment.
Pryor expects that increased K-12 school funding will lead to higher school readiness among 3- and 4-year-old children. Currently, children from low-income families show a higher lack of readiness than children of higher-income families. In turn, this should ease the need for professional staff required to mitigate school readiness issues.
She will also be monitoring the impact of increased school funding on the literacy test scores of third graders.
What’s in it for EP?
How does Eden Prairie benefit from all the new spending?
Many homeowners in Eden Prairie have experienced significant increases in their property taxes this year. Kotyza-Witthuhn explained that, with a portion of the one-time surplus funds, homeowners who now face a property tax increase of at least 6% will qualify for an increased maximum refund of $2,500. Previously, the threshold required a 12% increase, with a maximum refund of $1,000. She stressed that this change is temporary, as it is funded using one-time money from the surplus.
Cwodzinski pointed out that under the new legislation, school districts like Eden Prairie’s now have a one-time exemption from the requirement that renewal of existing operating school levies be subject to voter approval. Such renewals can now be approved by the School Board and effectively extends the effective period of such levies to 10 years. This saves the districts and taxpayers several thousand dollars otherwise required to hold elections to approve these levies.
Pryor and Kotyza-Witthuhn stated that the City of Eden Prairie can expect to receive one-time funding to address the erosion along the Minnesota River, which poses a significant threat of damage to properties along its banks in Eden Prairie.
All three legislators expressed a great sense of satisfaction with the accomplishments of the past session.
“In 33 years of teaching, I’ve never felt so exhausted,” Cwodzinski said. “It was stressful, but in a positive way.”
“It feels great,” Pryor said. “I’m still thinking about it and feeling good about what was accomplished.”
On Twitter, Kotyza-Witthuhn said: “6.5 months ago we were still waiting for election results. The @mnHouseDFL and the new @Senate DFL majority did the People’s work this session. Done, done and done.”
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