Coffee with Tom Sexton discusses fraud and corporate tax rates

During his session of Coffee with Tom Sexton on Friday, Dec. 12., Representative Sexton spoke to a small group about the fraud in this state citing former Minnesota Attorney General Andrew Luger, a Biden appointee, “Minnesota, you have a fraud problem.” AG Luger resigned in January of this year.

 

Minnesota corporate taxes have also gone to fraud, that money has been sent overseas, Sexton couldn’t help observing, “That’s not Minnesota nice.” An anonymous resident said, “It’s unbelievable to me that this amount of money could flow out and there was no one questioning it. I worked for a public school district for 30 years; our food service program received a heavy on-site audit every three years. These inspectors looked at, if there were 30 cans of tomato sauce, they checked to make sure that’s what was there.” Sexton referenced some places that receive state grants or bonds, “There are people who are absolutely paranoid about spending state money. Like they’re going to go to jail if they do it wrong. That’s what we like, that it’s spent appropriately, and it’s well documented, that’s how we prevent fraud. No one wants that limelight on them.”

 

Minnesota’s fiscal year runs from July 1 through June 30. Said Sexton, “There are so many things out there that have been implemented, as much as we would like to cut the budget by $17.8 billion of excessive spending that was done. Back in the 2023 session, a lot of things were implemented, and no one got a check back for those unused funds. That raised our budget by 40 percent.”

 

Sexton worries the tax revenue and the growth of the economy will not continue to increase as fast as inflation. He wants to reduce the budget even more to combat this. For the other side of the aisle, said Sexton, “We have enough revenue, we also have a spending problem. We’ve got to figure out how to spend within our own means.” A Minnesota Chamber of Commerce report states traditional corporations in Minnesota are not expanding in Minnesota. They’re not conducting research and development in this state because there’s no profitability. The highest corporate tax rates in the United States are: Iowa 12%, New Jersey 11.5%, Pennsylvania 9.9% and Minnesota at 9.8%. Sexton said, “Our 401Ks are all made up of corporations, who are shareholders as owners of that 401K. We need to look for areas to grow where we can be competitive such that we have shareholders and we’re basically paying our shareholders what they would get if they bought our stock, versus another stock.”

 

Paid Family Medical leave is going to be very difficult for a lot of these smaller companies to implement. Part of the 2023 surplus was used as seed money to pay the 400 employees who were hired to implement the Paid Family Leave program. “Many of the employers are going to a service to avoid penalties and to have this managed for them.”

 

Owatonna signed a contract with their police for guaranteed pay raises every year to make sure to retain those employees. The city doesn't want to lose its police officers to Northfield which now has openings, because some of those Northfield police officers left to go up to Lakeville and Burnsville, which had openings because Lakeville officers went up to Minneapolis and other big cities because there’s higher pay. Retirements also add to law enforcement shortages.