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Update from Representative Jenifer Loon March, 2009 Greetings to my fellow members of the Eden Prairie Chamber of Commerce. As a first-term legislator, my first few weeks “on the job” have been jam-packed with meetings and intensive briefings on programs under the jurisdiction of the Committees on which I serve. The analogy of “drinking from a fire hose” is often used to describe the experience—and is very accurate given the volume of information new members are trying to absorb. Right now, much of our work is occurring in Committee as bills are beginning their progression through the legislative process. I’ve been selected to serve on the Tax Committee, K-12 Education Policy Committee, Environment Policy Committee, and the Crime Victims/Criminal Records Division of the Civil Justice Committee. I’m especially pleased to have been chosen to serve on the full Tax Committee, one of only three freshman legislators given that assignment. It will provide me with a front line opportunity to fight for proposals to lower the tax burden on Minnesota’s families and job creators. The Legislative session which began on January 6th is predicted to be one of the most difficult in recent memory. The task before us is to craft a balanced budget for the 2010-2011 biennium in the wake of a deficit that is likely to be in the $6 to $7 billion range when the new forecast is released in early March. A deficit of this magnitude is approximately 20 percent of the State’s two-year budget. Governor Pawlenty has put forward his proposal for a balanced budget. Incorporated into his combination of spending reductions and reforms to streamline and consolidate government functions, are the Governor’s initiatives to enhance the future vitality and competitiveness of our State’s economy. His intentional focus, despite the difficult budget environment, on measures to encourage private sector job creation and position Minnesota companies to succeed in the regional, national and global arenas in which they compete are not only commendable, but necessary, to our State’s future. Key among the components of the Governor’s initiatives are a gradual reduction in the corporate tax rate, replacement of the capital equipment sales tax refund with an upfront exemption, a capital gains tax reduction for investment in small businesses, and other measures to encourage private investment in Minnesota businesses—both large and small. The Tax Committee has held several hearings to study and debate these proposals. Many of the provisions, in whole or part, were echoed in the recommendations of the 21st Century Tax Reform Commission, which released its report on February 13th (a copy of the report may be downloaded from http://www.taxes.state.mn.us/mntaxreform/index.shtml). While these recommendations are certain to be controversial—it’s critical that dialogue begin on whether or not our current tax structure contributes to, or inhibits, the creation of jobs in our State. To quote from the Tax Reform Commission’s report, “Only business and private investment can create the wealth necessary to drive growth across the private, government and nonprofit sectors and maintain that quality of life for all workers and their families.” In addition to proposing changes to our tax policies that would encourage private sector job creation, the Governor has also identified a strong K-12 education system as critical to the future of our state. Minnesota has long been able to boast a highly-educated workforce as one of our best resources. With the demographics of our State changing, it’s even more important that our schools educate every child to their full potential. We now have more “baby boomers” retiring than we have children entering school. As fewer workers will be entering the workforce to replace the retirees, it’s critical that workers have the skills to perform the jobs of the future. At the same time, our schools are facing unprecedented challenges, with more diverse student populations and a disturbing achievement gap existing between minority and non-minority children. By largely holding K-12 education funding harmless from the spending reductions proposed in other areas of the budget, the Governor has noted the essential nature of their mission. He also expands his “pay for performance” program, known as Q-comp, to incentivize teachers and schools to achieve better results in educating students to increasingly rigorous academic standards. Again, the specifics of these proposals are not without controversy, but the core idea is widely accepted. Excellence and accountability in our public schools is essential for our state’s economy, and our future. Tax policy and education are two broad areas of discussion surrounding the budget debate, and there will be many other issues of concern raised during this session. As community and business leaders, I encourage you to stay in frequent contact with me to share your views and opinions on matters before the legislature. You can email me at [email protected], or call my office at (651) 296-7449. I have also started sending out weekly updates on what’s happening at the legislature. Just drop me an email if you would like to be added to my email newsletter list. Thank you for the privilege of serving you in the State House. I look forward to receiving your comments and advice on how best to keep your businesses, and our State, moving forward. Jenifer Loon State Representative District 42B, Eden Prairie