Study shows $108 million in lower consumer prices, with the potential for more.
According to a new economic report released today by the Merchants Payments Coalition (MPC), debit card swipe fee reform has accomplished much of what Congress intended when it passed debit reform legislation in 2010 by pumping a significant infusion of savings and jobs into state economies across the country.
The report—The Costs and Benefits of Half a Loaf: The Economic Effects of Recent Regulation of Debit Card Interchange Fees—can be found at www.unfaircreditcardfees.com.
In Minnesota, the lower debit card swipe fee, which the Federal Reserve dropped from 48 cents per transaction to 24 cents, allowed Minnesota merchants to reduce costs, saving consumers nearly $108 million and spurred the creation of 690 new jobs in 2012.
The report also measured the potential impact on the U.S. economy had the Federal Reserve followed the language of the law. The Federal Reserve, for example, originally proposed a rate of at most 12 cents per debit swipe. In Minnesota alone, $51 million would have been generated in consumer savings along with an additional $23 million in merchant savings and this would have been sufficient enough to support an additional 328 jobs.
Had credit card swipe fees been reduced to 24 cents per transaction, Minnesota consumers would have saved an additional $283 million, merchants would have saved another $127 million, and 1,815 new jobs would have been created last year.
Special Session Provides Storm Relief, Skips Warehousing Tax And Minimum Wage
Legislators met in St. Paul yesterday for a "special session" called by Governor Mark Dayton to address storm relief for parts of Minnesota. After a few hours of procedural work, Legislators passed a $4.5 million storm relief package designed to facilitate Minnesota's acceptance of federal disaster funds.
Although prior to the special session there were discussions indicating a possible repeal of several business to business taxes enacted in the final hours of the 2013 legislative session, legislative leaders stayed focused on appropriating funds to leverage federal disaster dollars. Several business groups, including the Minnesota Retailers Association, had hoped for a repeal of a controversial business storage and warehouse tax that kicks in April, 2014.
Senate Majority Leader Tom Bakk ended the possibility of expanding the special session to issues beyond storm relief by calling such a move irresponsible, stating it would lead to an unbalanced state budget in the short term. Bakk added that until the State's November budget forecast is out there is no guarantee repealed taxes could be replaced with surplus revenues.
Also not addressed in special session was a left over issue from the 2013 session--a proposed increase of Minnesota's minimum wage to $9.50 by 2015. Efforts to "Raise the Wage" were prominent at the Minnesota State Fair, with a survey of 7,000 fair-goers conducted by the Minnesota House of Representatives showing 61 percent in favor of a $9.50 minimum wage.
DFL leadership in the Senate indicated during the special session that at the top of the priorities list for the 2014 Legislative session are passing a minimum wage increase and a bonding bill. The next regular session of the Minnesota Legislature kicks off February 25.
Storm relief, business to business taxes may be on the agenda
Governor Mark Dayton Minnesota Governor Mark Dayton is openly discussing bringing legislators back to the Capitol in September for special session to deal with storm relief. Business groups are pushing to add a repeal of recently enacted business to business services to that special session agenda.
Eighteen Minnesota counties have been approved for $17.8 million in federal aid for damage caused by June storms. Governor Dayton originally intended to call a special session to address only this issue, however the Governor has now indicated he is open to expanding the scope of the special session to include the repeal of the sales tax on farm equipment repair.
Business groups would like to see that list of possible appeals expanded to other business to business services including:
- Labor service charges for repair and maintenance of business equipment;
- Purchases of telecommunication equipment by telecom providers; and
- Storage and warehousing services of business-related goods.
Others would like to see the scope of a special session further expanded. Minnesota Representative Ryan Winkler, author of the minimum wage increase bill in the House, would like to use the special session to pass a minimum wage increase bill. Rep. Winkler has commented that he doesn't feel workers should not have to wait until 2014 for that increase.
Although the Governor has not indicated that the special session would include debate on minimum wage, conversations about the issue continue. The Select Committee on Living Wages, chaired by Rep. Winkler, is meeting in Brainerd on August 19 to discuss Minnesota's economy.