Thompson, Zellers push Dayton on warehouse tax repeal

Republicans are presenting a strong if not united front on the push to repeal a warehousing services tax during the upcoming special session. Once pegged to include only a storm relief bill, the one-day session planned for September 9 now seems destined to include the repeal of one unpopular tax, an agricultural repair service tax that kicked in on July 1. But that move has apparently just whetted the appetite of a group of outspoken Republicans, led alternately by caucus leaders and a pair of gubernatorial candidates.

Thursday morning, Sen. Dave Thompson, R-Lakeville, convened a Capitol press conference to urge Gov. Mark Dayton to include a repeal of the warehouse tax in the storm damage session, saying he had already drafted legislation drafted to that effect. Thompson is pushing for Dayton to reconsider a position he has made publicly and in writing. Earlier this week, Dayton sent a draft agreement to House Minority Leader Kurt Daudt and Senate Minority Leader David Hann, asking them to commit to a limited agenda of two bills — one for a few million dollars in storm relief and another to strike the agricultural tax — and no amendments.

GOP leaders balked at the offer, saying it should have included the warehouse tax, and are instead planning to hold face-to-face negotiations with Dayton and DFL legislative leaders late tomorrow afternoon.

Thompson, a candidate for the Republican gubernatorial endorsement, was flanked by several GOP legislators as he addressed the press. He said that as he has traveled the state campaigning, he has learned from Minnesotans that the warehouse tax is “toxic,” and would have a “ripple effect” on business activity in the state. Dayton has said publicly that a repeal of the business-to-business tax could come during the 2014 session, but Thompson said that would be too late, as businesses are already trying to plan out their budget and tax expenditures for next year.

The loss of projected collections from the agriculture tax will remove $29 million in revenue from the DFL majority’s 2014-15 budget, and the warehouse tax would take away an additional $90 million. Thompson said dealing with the revenue decrease would be a problem regardless of whether the tax was repealed in September or during the 2014 session. As for specific recommendations for budget cuts, Thompson said he would start by eliminating the reinstated political contribution refund. Though that typically costs the state only a few million dollars per year, Thompson said there are numerous other expenses in the DFL budget that could be cut or terminated.

At one point, Thompson was asked whether he was holding the press conference in his role as a senator or a gubernatorial candidate.

“Yes,” he deadpanned, drawing laughs from legislators and the Capitol press corps.

Earlier Thursday, Rep. Kurt Zellers, R-Maple Grove, issued a joint press release with Rep. Tim Kelly, saying that they, too, would enter a bill to remove warehousing services from the tax code. Zellers, who is also seeking the GOP nomination to challenge Dayton in 2014, has issued numerous statements condemning the warehouse tax and calling for a preemptive repeal.

“By declaring that he only will allow repeal of one of these taxes during the special session,” Zellers said, “Governor Dayton has decided to pit one group against the others, at the expense of jobs in Minnesota.”

Thompson told reporters he had invited Zellers to join him at the podium that day, and was pleased to know that the two were on the same page.

Later in the same conference, Sen. Warren Limmer, R-Maple Grove, stepped to the microphone to remind everyone that while only the governor can convene a special session, only the Legislature can adjourn it. Though Dayton might try to dictate the agenda, as prior governors had attempted, Limmer warned that the actual content of the session would be determined by legislators.

“It’s an open playing field, and that’s always the concern of any governor,” Limmer said.