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Capitol View®
Tim Pugmire

Bakk wants to stash part of surplus

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The top Democrat in the Minnesota Senate says he wants to hold back a big chunk of the budget surplus as protection against a pending tax lawsuit against the state.

Senate Majority Leader Tom Bakk, DFL-Cook told reporters today that he has concerns about the lawsuit Texas-based Kimberly-Clark Corporation filed over state tax liability calculations. He said if the state loses and other companies can make the same case it could end up costing Minnesota  $700 million.

Lawmakers learned last week that they now have a nearly $1.9 billion budget cushion. But Bakk said he’ll push for not spending it all.

“I think we would be wise to stash some of this surplus away in the event we’re not successful in court, and I understand that’s going to happen likely sometime later this year,” Bakk said.

The state tax court is expected to take up the case later this month.

Bakk also said he’s not interested in the proposal from House Republicans to give a majority of the surplus back to Minnesotans through tax cuts.

“This premise that somehow if we cut taxes that will lead to economic prosperity is false,” he said.

Senate Democrats plan to release a framework for their two-year budget proposal on Thursday, according to Bakk.