Minnesota businesses see tax hike amid UI impasse at Capitol

ST. PAUL, Minn. (AP) — Employers across Minnesota are getting higher tax bills after lawmakers failed to reach a deal by a Tuesday deadline to avert an automatic unemployment insurance tax hike.

Democratic Gov. Tim Walz proposed tapping Minnesota’s budget surplus to repay the federal government for jobless aid and replenish the state’s depleted unemployment insurance trust fund. The Republican-controlled Senate agreed on a bipartisan vote of 55-11. But House Democratic leaders are holding out for $1 billion in “hero pay” for front-line workers.

It’s possible that the state could rebate the tax increase if a deal is reached to break the impasse. But officials say that would be complicated.