Senate Republicans, led by Minority Leader David Hann, R-Eden Prairie, and Sen. Dave Thompson, R-Lakeville, proposed cutting income tax rates by half a percentage point.
The rate cut would reduce the lowest rate from 5.35 percent to 4.85 percent, for instance, while cutting the new top fourth tier rate from 9.85 percent to 9.35 percent.
The average cut for a single filer would be $167, with a reduction of $524 for married filers. The total cost would be $1.1 billion during the next biennium.
Senate Republicans have also proposed cutting taxes for families with children, veterans and seniors.
The across-the-board income tax cut contrasts with House Republicans, who are planning targeted relief of $2 billion for various constituencies and interest groups.
Senate Majority Leader Tom Bakk, DFL-Cook, has said he won't repeat the policies of the 1990s, when legislators cut taxes during surplus years only to face more than a decade of troubled budgets once economic conditions changed.
Gov. Mark Dayton delivers his fifth State of the State speech, and first of his second term, before a crowd of state lawmakers and other officials Thursday night in the House chamber.
Dayton said last week that his 7 p.m. speech would likely run about 30 minutes. He's expected to put a particular emphasis on what's become his signature proposal of the 2015 session, a multimillion dollar spending boost for early learning programs including universal preschool at Minnesota public schools.
Dayton will have a number of guests watching the speech at his invitation, including former Gov. Wendell Anderson, his son Eric Dayton; Ibrahim Mohamed, a Dayton appointee to the Metropolitan Airports Commission who drives a luggage cart at the Twin Cities airport; a father and daughter from Maxfield Elementary whom Dayton met on a visit to the school; a preschool teacher from Newport Elementary School; Worthington Mayor Mike Kuhle, and the U of M and MnSCU chancellors.
Dayton's speech will be streamed live at Startribune.com. Political reporters Abby Simons and Patrick Condon will be tweeting about the speech at @ajillsimons and @patricktcondon. A full story about the speech will be posted online and published in Friday's newspaper.
Senate Majority Leader Tom Bakk will meet next week at the Capitol with the private group trying to bring Major League Soccer to downtown Minneapolis, but a spokeswoman for the Senate leader said he remains firmly opposed to any public subsidy for the venture.
The meeting between Bakk and former UnitedHealth CEO Bill McGuire is set for next Tuesday afternoon at the Capitol, said Alyssa Siems Roberson, Bakk's spokeswoman. She said McGuire's group asked for the meeting and that Bakk's office assumes it's to request some type of taxpayer assistance for a stadium they want to build near the Minneapolis Farmer's Market.
To date, no details of any subsidy request has been released publicly.
Last month Major League Soccer's commissioner awarded a franchise to McGuire's group, despite efforts by the Minnesota Vikings owners to land a soccer team for the new football stadium already under construction.
Bakk, Gov. Mark Dayton and House Speaker Kurt Daudt have all repeatedly poured cold water on the notion that state lawmakers would approve any kind of state help for another new stadium. Dayton said state leaders have "stadium fatigue" after approving public subsidies in recent years for the Twins, Vikings and University of Minnesota stadiums.
As of Wednesday night, neither Daudt nor Dayton had any meetings scheduled with McGuire, according to their respective spokespeople.
A bipartisan group of state lawmakers want to cut state taxes on premium cigars, as small retailers that sell the high-end products complain that the 2013 hike in tobacco taxes has cut deeply into their profits.
"This would not be rolling back taxes on all smoking by any stretch," said Rich Lewis, who has owned and operated Lewis Pipe & Tobacco in downtown Minneapolis for 40 years. "It would give us a chance to get our business going again."
Anti-smoking advocates have started mobilizing against the measure, as they draw links between evidence that smoking rates have fallen in Minnesota since the 2013 tobacco tax increase, which amounted to about $1.60 additional on a pack of cigarettes.
"Minnesota has a history of being hard on tobacco," said Michelle Morris, manager of tobacco prevention programs at the state chapter of the American Lung Association. "We should be celebrating these policies, not undoing them."
Still, the cigar tax cut proposal has high-powered support at the Capitol. Senate Majority Leader Tom Bakk, DFL-Cook, is a co-sponsor of the Senate bill. The Senate Taxes Committee reviewed the proposal Wednesday, and flagged it for possible inclusion in a broader omnibus tax bill.
Molly Moilanen, chief lobbyist for the anti-smoking coalition ClearWay Minnesota, said she thinks the cigar tax cut is likely to be included in the House's omnibus tax bill, making it a possible candidate for inclusion in the final tax bill that's sent to Gov. Mark Dayton. The House version of the bill is sponsored by nearly a dozen members of the Republican majority.
"They're going to decide if they want a tax break for tobacco companies and merchants at a time when they're proposing cuts to health care programs," Moilanen said of House Republicans. Preliminary estimates say it would cost the state about $1 million a year in lost tax proceeds if the cigar tax is reduced.
Sen. Dave Senjem, the chief Senate sponsor, said it's not a debate about the health implications of smoking. "That's a foregone conclusion," Senjem said. But as a matter of tax policy, Senjem said high-end cigars are taxed unfairly.
Every premium cigar, which is defined in state law as one that has been hand-rolled rather than machine-cut, is subject to a state tax that's 95 percent of its wholesale cost. That's capped at $3.50 per cigar, meaning every cigar that costs more than about $10 costs an additional $3.50 in taxes.
"So if you're trying to sell a box of 20 ten-dollar cigars, your customer is going to be paying $200 plus an additional $70 in taxes," Lewis said. Under the House and Senate bills, the cap would drop from $3.50 per cigar to 50 cents.
Increasingly, he said, customers have other options: they can go to cigar shops in Hudson, Wis., which already caps its per-cigar tax at 50 cents; or they can buy boxes of cigars online, where similarly low tax rates can be found.
"As it is now people just don't buy boxes of cigars anymore," Lewis said. He estimated his profits fell by about a quarter after the 2013 tobacco tax increase.
Gov. Mark Dayton will announced his $850-million bonding bill Tuesday, which is expected to fund construction projects and create jobs across the state.
Characterized as a jobs bill, the legislation comes even as leaders in the Republican-led House have said they don't have plans on proposing a bonding bill this year. Bonding bills have to originate in the House, and as a result, the Senate may follow suit. Senate Majority Leader Tom Bakk, DFL-Cook, said late last month that he instructed Senate leaders to come up with options in case a bonding bill is produced.
Dayton expects to announce the legislation at 10 a.m. Tuesday, along with Minnesota Management and Budget Commissioner Myron Frans.
Later Tuesday morning, Dayton and Frans will host a conference call with reporters from around the state, a nod that many of the planned projects the bill would fund are in rural Minnesota.