MN House Passes $503M Tax Pullback Bill

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  1. The MN House of Representatives has passed a $50 M package of tax conformity measures and repeals aimed at middle class taxpayers and businesses.  The House passed the tax relief package on a vote of 126-2.  The only members voting against the measure were Rep. Ryan Winkler of Golden Valley and Rep. Jason Metsa of Virginia, both democrats. The bill targets $200M of relief at middle class families.  The bulk of the relief comes from aligning Minnesota's tax code with the IRS.
  2. By conforming the state tax code, the bill would effectively eliminate the Minnesota marriage penalty and provide 54,000 families with a Working Family Credit.  Recent college grads would also be able to deduct the interest on their student loans.  This could save them up to $190 dollars a year.
  3. While the bill received the vote of every House Republican, GOP tax leader, Rep. Greg Davids said the bill "is only a minor cleanup to the debacle of last year."  That's when the DLF controlled House and Governor Dayton passed more than $2 billion in new tax increases.  Since then, the new February budget forecast revealed a $1.23 billion dollar surplus, based mostly upon economic growth in the state.   With the high surplus, the House and Senate have been working on bills to repeal some of the tax increases including three controversial business-to-business taxes.  They include a tax on warehoused goods in Minnesota, a tax on services that businesses buy from each other, and a tax on telecommunications equipment.  Critics of the telecom tax say it's crippling the expansion of broadband services in rural Minnesota.
  4. DFL House leadership, including Tax Chair Ann Lenczweski of Bloomington revealed they will try to offer more tax relief in a second bill yet this session.  They specifically want to reduce property taxes, although they would not say how much money they would spend or how it would be targeted.
  5. Governor Dayton today also revealed how he wants to spend the budget surplus.  He released what's called a supplemental budget document that spends $113 million more on tax reductions than the house plan.  In a conference call with reporters, the governor said he wants half of the surplus deposited into the state reserve fund--often called a rainy day fund.  The governor says the state hasn't contributed to the budget reserve since 2001 and it would help the state weather another recession or economic slowdown.