Behind A $42 Billion Budget, Smaller Fees Rack Up

ST. PAUL, Minn. (AP) — Minnesota lawmakers kept tax levels steady but still found ways to scoop up millions of additional dollars in its next two-year budget.

More than a dozen new fees and increases for business licenses are tucked away in the thousands of pages that compose Minnesota's new budget, from additional fees for beauty salon employees and funeral directors to higher state fees dairy manufacturers pay when they purchase milk from farmers starting Aug. 1.

It's a frequent play by tax-averse politicians, who direct the revenue to pay for that industry's oversight rather than tap precious general tax dollars.

The state doesn't track the total scope of new fees — the money gets socked away in dedicated regulatory funds — but estimates on some of the individual increases add up to more than $6 million in new revenue. That sum pales in comparison to the $42 billion in state tax dollars authorized by the Legislature's recently completed budget.

Most cost increases to employees and businesses are minimal: an extra $15 for pharmacists' annual license or another $88 every other year for dental hygienists. Industry representatives said the added costs are so small that they would likely have little to no bearing on the price of a haircut or a loved one's funeral services.

But the new funds still have broad reach: pharmacists, dentists, optometrists, pet food manufacturers and other businesses all face a higher bill to the state. And in many cases, they will provide a much-needed infusion for overburdened state regulators.

Minnesota's Board of Cosmetologist Examiners has struggled keeping up with complaints and inspections at more than 5,500 nail, hair and skin salons, shifting staff to handle the constant flood of applications and renewals from new beauticians. Executive Director Gina Fast Stauss said their "significant" understaffing called for the first increase to industry licensing fees in more than a decade.

"We can't inspect regularly," she said.

The Legislature authorized increasing fees across the board, for salon employees, managers, beauty schools and the facilities themselves. A hair stylist or nail technician, for instance, would pay an extra $10 every three years when their license is due for renewal.

Fast Stauss said that new money — an estimated $2 million or more — will help the board bring on more than 13 additional employees. It's an additional cost many salons are willing to pay, said Susan Brinkhaus of the Spa and Salon Professional Association, and one that likely won't add to the cost of a haircut or pedicure.

"These fees are really going to help run them more efficiently," she said.

One line in a budget that funds environmental and agricultural programs increased — by just a fraction of a cent — how much dairy manufacturers pay the state for every 100 pounds of milk they buy from farmers. In a state that produces about 9 billion gallons of milk each year, the new 1.1 cent charge will add about $360,000 in costs to farmers, Bob LaFave from the Minnesota Milk Producers estimated.

LaFave said farmers support putting up the extra money but would have preferred the state tap a sizable surplus to shore up an account that helps fund inspectors.

"Indirectly, it will come out of the dairy farmers milk check," he said.

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