Minnesota currently faces a moderate level taxation threat. During 2003, $4.5-billion in spending was cut to eliminate the largest deficit in state history. Looking to 2004, deficits are likely to return, although they will total only about $200-$400 million, less than the state's $500-million reserve. Minnesota is also currently seeing the effects of a strong "no new tax" campaign carried out by the Minnesota Taxpayers League, with backing from several Republicans, including the governor. The 2004 session will be focused primarily on bonding projects-the budget as a whole will not be addressed again until 2005, further reducing the likelihood of a tax battle.
That said, turnover among bank lobbyists leads Minnesota to anticipate a more aggressive "anti-credit union" strategy in future sessions. Facts about credit unions' non-profit structure and the credit union difference are used to refute erroneous claims. Information on the subchapter S banks has been very valuable, as it destroys the argument of banks asking for a "level playing field" and puts banks' own tax-exemption at risk.
