Minnesota is the best run state

MN state capital building
Minnesota State Capital

According to 24/7 Wall Street, Minnesota is the best-run state in America.

  • 2016 Unemployment: 3.9% (13th lowest)
  • Pension funded ratio: 79.8% (18th highest)
  •  Credit rating and outlook: Aa1/Stable
  • Poverty: 9.9% (6th lowest)

We have jobs with decent wages and more than 10,000 lakes. Yes, we pay state income taxes but we get a lot in return. We also have a beautiful newly renovated State Capital building.

Winter isn’t so bad if you dress for it. Spring, Summer, and Fall are amazing. We don’t have hurricanes and wildfires and earthquakes are rare. Mosquitoes are abundant but never in the winter.

Covered under the first amendement


American flag
American Flag

The First Amendment

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Passed by Congress September 25, 1789. Ratified December 15, 1791. The first 10 amendments form the Bill of Rights
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When I look at the first amendment it is clear to me that no one in this country has to worship the flag of this country. We are free to worship and kneel or not kneel or stand or not stand before the flag. We are also free to believe in God but we don’t have to.

This truly is a great country. Let’s keep it great.

How tax bill may affect the housing market


It is really too soon to tell how the tax bill will affect the housing market. On the one hand, it shouldn’t have much of an impact on housing that is costs less than 650K because the mortgage interest on a mortgage up tp 500K will still be tax deductible, for those who itemize.

If the tax bill passes as is  95% of taxpayers will claim the standard deduction rather than itemize, according to experts because the standard deduction will almost double.

That means that mortgage interest will not be deducted for most. Currently according to the IRS about 31% of taxpayers itemize, and can deduct mortgage interest.

If higher priced homes decrease in value that doesn’t mean that lower-priced homes will follow. The demand for homes at the lower end of the price spectrum is very high and I can’t see that changing.

There is some speculation that if interest on loans used to pay for second homes is not longer tax deductible that prices of the summer cabins in Northern Minnesota will go down. I will believe it when I see it.

The five of eight rule may have an impact.  Under current law, you can exclude up to $250,000 ($500,000 for married taxpayers) in capital gains from the sale of your home so long as you have owned and resided in the house for at least two of the last five years.

That rule is going to change to five of the last eight years. The rule will make homeownership more of a long term proposition and home sellers may want to consult a tax advisor if they wish to sell before they have owned the home for eight years.

People used to move about every 7 years but in the last decade, that has changed to about every 10 years so it is hard to say what kind of an impact the new five of eight rule will have on the real estate market.

I remember the big tax cuts during when Reagan was president. At the time we were in a recession. I don’t really understand why a tax cut and jobs bill is being passed during a time of high employment. In fact, we may not have enough workers to fill more jobs.

It isn’t clear to me right now as a business owner if my taxes will go up or down. The tax cuts are aimed at large corporations not at small businesses like mine that make up 99.7% of all U.S. businesses.

The Republican party used to be against running huge deficits but now they are in favor. Here is a link to a list of how they voted.

The bill will not be made into law until it is reconciled with the House bill and signed by the president who will sign anything he is asked to sign . . . or at least he has so far.

There are still numerous advantages to home ownership as opposed to renting. Interest rates are likely to continue to rise so buying a house now might make more sense than buying it later.

Real estate has been a tax favored investment for decades yet homeownership is currently at a 50 year low last July and has started to go up again. Will new tax laws cause home ownership to fall again?

Something to be thankful for

Wild turkey

I have a lot to be thankful for. Right now I am especially thankful for the fact that I don’t have to go out and catch a turkey and get it ready for the oven.  I find turkeys in the woods and along the bike paths in Lilydale regional park. They can run pretty fast and they look big and mean. Sometimes they hang out in gangs and block the bike path.

If you are preparing your first Thanksgiving turkey this year, don’t worry. Turkeys are easy to roast, and yes I know they can be deep fried but I like roasted turkey. Just remember to calculate cooking time based on the weight of the turkey and a low temperature, like 325. Cook the bird until the meat thermometer reads 165.

One member of my family has celiacs disease and another has food allergies. I am happy to report that turkeys are naturally gluten-free and don’t seem to trigger allergic reactions. I am thankful for that too.

Wishing you all a happy Thanksgiving.

Shipping season on the Mississippi River

Barges on the Mississippi River

Barges on the river near downtown. The buildings in the background are in downtown St. Paul. You can take a picture like this from the MRT bike trail in between Warner Road and the river.

There are no ice cutters on the river. The shipping season starts each year when the barges can get through the ice. The river near St. Paul does not freeze solid but can ice over on the surface. There isn’t any ice yet.

The Mississippi is a wonderful natural resource but it is also an important shipping corridor. The shipping industry provides jobs too. Those barges need to be loaded and unloaded and the tugboats and towboats that push the barges need pilots and crews.

Barges are fun to photograph because they often have rust on them.

The brown pre-winter season

fall color
Tree by the river

The color is mostly gone from the trees and there isn’t any snow on the ground. The winter cold is here. There should be a name for this season.

The inventory of homes on the market in St. Paul has dropped by about a 100 in the last two weeks. We have about 575 homes on the market and more than 100 of them have offers on them.

Often people want to wait until after the holidays or after the first of the year to sell. Generally, the fewest homes are on the market in December.

People who are interested in buying a home should be ready to pounce during this 5th season when a suitable home comes on the market.