Let’s talk about junk fees. We debated this for several hours on the House floor at the end of the session. Why? Businesses know their food and labor costs. While food costs have increased rapidly, if a hamburger costs $20 in some Minnesota communities, it’s often due to government mandates rather than just food or labor costs. Therefore, some businesses, particularly in the Twin Cities, added a fee at the bottom of the bill to summarize these added costs. They called it health and wellness or other terms instead of stating “a fee to absorb laws passed by elected officials” which increased the cost of providing items purchased.
What are some of these laws? For example:
– The State of Minnesota minimum wage is $10.85 for large employers as of January 1, 2024.
– Minneapolis passed a law for a minimum wage of $15.57 for large businesses (more than 100 employees) and franchises as of January 1, 2024. By July 1, 2024, all other employers must pay the same.
Companies were trying to be transparent with the public. Most people know a hamburger doesn’t usually cost $20, and some companies wanted to explain the reason rather than just inflate the menu prices. When a city chooses a minimum wage higher than the rest of the state, it’s logical for consumers to wonder why a hamburger costs more in one area than another. Some businesses chose to itemize these costs at the end of the receipt to reflect the mandates imposed on them. Now, these businesses will be forced to bake the costs into every item sold, which many see as non-transparent. This is why we had hours of discussion.
Many are referring to the new delivery fee, or the “Amazon” delivery fee, as a junk fee. The Minnesota government budget grew by 40% in new spending, and the tax base was increased by $10 billion in new taxes and fees. One of these new fees is a delivery fee for every single package that arrives at your home costing $100 or more for clothing, supplies, pet supplies, etc. This will harm those who do not drive or are not able to shop, and those who are struggling financially and rely on delivered items.
When Minnesota started 2023 with a $17.5 billion surplus, it was spent in just five months while simultaneously increasing costs for low- and middle-income residents with additional taxes on everyday items like gas and home deliveries. This is the unspoken junk fee. Not every Minnesotan eats out weekly at a restaurant, but most are getting gas at the station or receiving packages at their home.
A logical way to increase road and bridge funding would be to ensure those who drive electric vehicles pay their fair share for the roads and bridges used. Currently, those who gas up at the pumps pay a gas tax indexed to inflation to fund our roads, but those who drive electric do not. Therefore, I drafted a bill for fairness in taxation for all electric vehicle owners to match those driving gas/diesel vehicles. However, the majority party refused to hear the bill in committee, so it never progressed.
Minnesotans have discovered the real junk fees that don’t get talked about. These include increased costs passed in 2023-2024 for the gas tax and delivery tax that affects most Minnesotans. Those purchasing electric vehicles get rebates of thousands, yet they do not pay equitably with fuel-consuming vehicles for the same roads and bridges used. Minnesotans are feeling the pain of an inflation-based gas tax and a delivery tax. That seems to qualify as junk fees to many.
