House DFLers released a small tax cut proposal Wednesday, providing breaks for farmers, homeowners and small businesses owners.
“We were pleased that we moved forward so quickly this session to cut taxes for more than one million Minnesotans, but we have more work to do this session to continue making progress,” said House Taxes Committee Chairwoman Rep. Ann Lenczewski, DFL-Bloomington. “We believe this is a responsible way to continue expanding our economy from the middle-out while maintaining our stable budget into the future.”
The measure includes $45 million in targeted property tax relief to Minnesota homeowners, renters, and farmers.
An average family farmer in Minnesota will see $460 in property tax relief, under the proposal. Homeowners will get some relief through a one-time increase in the homestead credit. Renters will see a one-time increase in a credit that will aid about 350,000 Minnesota renters.
Rep. Jim Davnie, DFL- Minneapolis, who chairs the House Property Tax Division, said farmers are still experiencing property tax increases due to significant increases in market value. This comes despite significant money being devoted by the state to buy down property taxes.
“This bill will build on our progress and help put more in the pockets of homeowners, renters and farmers,” Davnie said.
House Democrats want to give a property tax cut for small businesses with property value less than $1.1 million.
The measure also provides tax relief to our active military members by extending our active military income tax subtraction to National Guard service members in the Active Guard Reserve.
This is the second major tax proposal of the session. Gov. Mark Dayton signed the first one last week, which provided about $440 million in tax relief for more than 1 million Minnesotans.
Legislators are still dealing with about half of the $1.2 billion projected budget surplus. Along with the tax cuts, legislators set aside $150 million to bolster the state’s budget reserves.
Gov. Mark Dayton is making more progress on his initiative to delete unnecessary and burdensome laws from the statute books.
Dayton signed a measure into law Tuesday that include dozens of provisions relating to the governor's streamlining initiative, which he is calling the “unsession.”
The measure eliminated 27 higher education provisions deemed unnecessary or redundant. The measure passed unanimously in the House and the Senate.
Legislators are dealing with more streamlining initiatives this week, with some having crucial committee stops.
Dayton’s tops staffers are tracking progress of the 1,000 proposed streamlining measures, seeing where they snag up in committee and trying to negotiate changes.
The governor's staff is determined to make sure the proposals honor Dayton's goal of making government less cumbersome and aggravating for consumers.
Republicans have criticized the proposal for lacking in ambitious and failing to deal with some of the larger and more controversial areas of government, like health insurance reform and the proposed Senate office building.
More than 1.2 million Minnesotans will get tax breaks under a sweeping tax relief proposal the Legislature overwhelmingly approved and Gov. Mark Dayton signed Friday.
Working families, married couples and those who adopted children will be among the biggest winners in a proposal that includes more than $444 million in permanent tax relief, including about $57 million that will be retroactive for 2013.
After passing the Senate 58-5, the House passed it 126-2. Dayton quickly signed the bill into law Friday night.
“The urgency was apparent,” Dayton said, during a celebratory press conference with DFL House and Senate leaders.
“This is a monumental victory for the DFL leadership in the Legislature and just shows that we have a balanced approach in Minnesota. That’s what people wanted," Dayton said.
Revenue Commissioner Myron Frans said that his staff would work through the weekend to put the tax cuts into place.
“If you have not filed your tax return yet, we would advise you to wait until Monday,” Frans said.
He said that the department will contact Minnesotans who already filed who would be eligible for refunds to make sure they get the money back that they deserve. About half of Minnesotans have already filed their 2013 tax returns.
Among those who may be eligible for tax breaks: college students, educators, lower income families and those with mortgage insurance deductions. A one-day delay, forced by Senate Republicans' unwillingness to vote on the measure the same day it was first released, will not change anyone’s eligibility for tax breaks, Frans said.
Legislators are also racing to finish the tax proposal to repeal new business sales taxes, including a much-criticized levy on warehousing services that is set to take effect in about a week.
Democrats, who control both chambers of the Legislature, are paying for the tax relief from a $1.2 billion budget surplus. This is the first windfall in years that wasn’t already earmarked to replenish reserves or repay billions the state borrowed from public schools to balance the budget during the last recession.
Along with the tax cuts, lawmakers added $150 million to the budget reserves, bringing the state’s rainy-day fund to more than $800 million. The state’s budget reserves are far below what is recommended by national credit-rating agencies, which have downgraded the state’s credit rating due to the low reserves and reliance on one-time accounting shifts and borrowing to balance.
Republicans have sharply criticized the increased budget reserves, saying the money is better off in the pockets of taxpayers than in the state bank account.
“They will spend it more wisely than government every day of the week,” said Sen. Julianne Ortman, R-Chanhassen. “And they will get a better return.”
State Senate Republicans want to increase tax relief for Minnesotans this year by proposing more than $360 million in permanent sales tax relief.
“Sales taxes affect everybody,” said Senate Minority Leader David Hann, R-Eden Prairie. Sales tax relief “is abundantly fair.”
Senate Republicans want to lower the state sales tax rate to 6.375 percent, from 6.875 percent.
The proposal comes as DFL leaders who control the Senate finalized more than $500 million in tax relief for consumers and businesses. The measure is expected to get a final vote Thursday.
Legislators are wrestling with a $1.2 billion projected budget surplus, which comes largely from the state’s strong economic performance.
Republicans have argued that Democrats raised too many new taxes last year. They have proposed returning nearly all of it to taxpayers, which could dramatically wipe out projected surpluses in the following years and potentially send the state into deficit again.
Senate Democrats are taking a more cautious approach and are trying to spend the money in ways that doesn’t blow a monster hole in the budget it future years. The Senate strongly supports using some of the surplus to bolster the state’s reserves by another $150 million, bringing the state’s rainy-day fund to around $750 million.
Senate Taxes Committee Chairman Rod Skoe said he does not want a repeat of the last decade, where the state was locked in cycle of deficits and emergency budget cutting that damaged the state's credit rating.
“We don’t want to go through that again,” said Skoe, DFL-Clearbrook. “A little bit of caution is in order.”
Republicans oppose building up the reserves, saying the tax money should be in the economy, not sitting in the state’s bank account.
“We are better off letting people keep their money in their pockets,” Hann said.
A new report finds that both the successful campaign to legalize gay marriage and the unsuccessful campaign to stop cigarette and tobacco tax increases spent more than $1 million on lobbying in Minnesota last year.
The report, released Tuesday by the Minnesota Campaign Finance and Public Disclosure Board, shows that the pro-gay marriage Minnesotans United and the Altria Client Services, the parent company for Philip Morris, joined the million dollar spenders for the first time in 2013.
Also appearing on the big spender list -- business groups and the teachers union. With spending of more than $2 million, the Minnesota Chamber of Commerce was the single biggest spender on lobbying, as it often is.
Reports to the campaign watchdog agency found that both the Chamber and the Minnesota Business Partnership increased their spending last year. The chamber spent $100,000 more than it had in 2012 and the Business Partnership spent $600,000 more. The Business Partnership spent a total of nearly $1.5 million in 2013.
The two business groups successfully batted back massive proposed business-to-business tax increases in 2013. Some smaller tax increases on businesses transactions with other businesses did pass, however, This year's Legislature is looking at repealing those.
Education Minnesota's lobbying spending came in just behind the business groups, with $1.2 million in spending on lobbying. That, too, constitutes an increase from the year before but is still slightly less than the massive teacher's union spent in 2009.
See all the big spenders in the list below:
|Vikings (7)||Health care (1)|
|1st District (131)||2nd District (127)|
|3rd District (103)||4th District (75)|
|5th District (149)||6th District (521)|
|Funding (656)||Health care (219)|
|Minnesota U.S. senators (514)||Minnesota campaigns (1380)|
|Minnesota congressional (749)||Minnesota governor (1627)|
|Minnesota legislature (1901)||Minnesota state senators (799)|
|National campaigns (461)||President Obama (363)|
|State budgets (805)||Celebrities (1)|
|Anoka (1)||Fridley (1)|
|2012 Presidential election (321)||7th District (87)|
|8th District (194)||NHL news (1)|
|Gov. Tim Pawlenty (451)||Political ads (86)|
|Recount (95)||Gov. Mark Dayton (1166)|
|Democrats (984)||Republicans (1139)|
|Morning Hot Dish newsletter (59)||Sept11 (1)|
|Public safety (2)||Marriage Amendment News (1)|
|Voter ID News (2)||Budget news (4)|