The first tax bill of Minnesota’s 2015 legislative session is proceeding at what House taxes chair Greg Davids calls “warp speed” — and given the usual plodding pace of tax legislation, that description is apt. Action this week has a bill that conforms the state tax code to recent federal changes on schedule to land on Gov. Mark Dayton’s desk by next Tuesday, the opening day of the 2015 state and federal individual income tax filing period.
The bill’s impact is small in the aggregate. It is projected to cost the state treasury $20 million in the current fiscal year, create a gain for the state of $22.4 million in fiscal 2016 and drain about $15 million from expected state revenues in the 2017-18 biennium — a modest sum in a $20-billion-a-year state general fund.
But if you are a teacher who spends more than $250 a year on classroom supplies, or a former owner of a home sold in a short sale, or a business owner trying to make sense of differing state and federal equipment depreciation rules, this tax bill is significant to you. And if you are a tax preparer, either for yourself or others, this bill will spare you at least some of the complexity that arises when the state and federal tax codes are not in sync.
The bill is vital to Rochester’s Destination Medical Center project. It amends disputed language passed in 2013 to clarify that the private investments needed to trigger a state subsidy for infrastructure should be tallied cumulatively, not annually. An attorney general’s opinion that the original 2013 language called for the contrary put a legal cloud over the state’s $455 million, 20-year subsidy, which is a crucial component of the project.
The bill also includes a hopeful note for parents of disabled children. Legislation is proceeding separately to allow parents to create savings accounts for permanently disabled children that can be tapped when they are adults to supplement, not supplant, Medicaid and other governmental support programs they might receive.
That proposal is in keeping with an opportunity Congress extended to the states last year. While the measure has not yet advanced in other committees, the tax bill already adjusts state revenue projections to account for its modest cost, suggesting that legislators assume it will pass.
Overall, the early tax bill is a solid package of tax adjustments that deserves to become law. But what we like best about it is what it does not contain and has not engendered. To date, it is free of partisan poison pills, veto bait, special interest sops and other indigestible elements of the sort that have appeared in previous tax bills when power is divided between two parties at the Capitol.
The bill is the product of evidently amicable collaboration between Senate DFL Taxes Committee chair Rod Skoe and the Republican-controlled House’s Davids, who indicated Tuesday that he was also working with his Taxes Committee predecessor, DFL Rep. Ann Lenczewski, an architect of the Destination Medical Center legislation in 2013. Committee conversations about the bill have been businesslike and free of partisan rancor.
We also admire the bill’s pace. It’s zipping along nicely, with an eye to the tax filing calendar. This year’s legislators are evincing a good deal more respect for tax return filing dates than did their predecessors in 2014, when a more complicated “early” tax bill did not become law until late March and some Minnesotans were required to file amended returns to receive their rightful refunds.
To legislators: Keep it up today and in coming days. Keep the bill clean, and keep it moving. To Minnesotans who wonder whether the latest version of divided state government will be functional and responsible: Watch the fate of House File 6.