Minnesota House DFL leaders, locked in a tough battle to retain their majority, announced a plan to freeze public college and university tuition for two more years, until 2017, following a tuition freeze in 2014 and 2015.
“All Minnesota students deserve the opportunity to go to college and receive a degree – without finding themselves under a mountain of debt,” Speaker Paul Thissen said in a news release.
College-aged voters can be fickle, especially in non-presidential years, so DFL leaders may be expending extra effort to get them to the polls this year.
The plan won’t be free. Earlier this month, the University of Minnesota proposed a tuition freeze, in exchange for $127 million — or 10.6 percent — in extra state funding over the next two years, to pay for the tuition plan and other initiatives.
Minnesota State Colleges and Universities offered its own similar proposal: A tuition freeze in exchange for an extra $142 million.
The House DFL plan would also expand loan forgiveness to graduates working in high demand jobs in rural Minnesota, as well as debt relief to graduates working for ServeMinnesota, the state's AmeriCorps offshoot.
Asked how the freeze would be paid for, House DFL spokesman Michael Howard said legislative leaders are working on determining the cost and a plan to pay for it. "Freezing tuition would certainly be a significant investment, but the objective would be that a tuition freeze would come from a mix of additional state dollars and reduction in administrative costs at" the universities, he said.
Updated, with comments from House DFL spokesman Michael Howard on paying for the proposal.
Net Minnesota tax collections were $1.35 billion in August, falling just short of officials' projections in February, the Minnesota Management and Budget Office reported Wednesday.
Overall income tax, sales tax and corporate taxes were off a combined $10 million, about 0.7 percent below a February forecast.Individual income tax withholding was $621 million in August, sales tax receipts were $503 million. For fiscal year 2015, tax collections are at $2.3 billion, down 3.3 percent from estimates.
Minnesota Management and Budget officials said in a statement that monthly revenue reports are preliminary and can vary wildly from month to month.
A $3 million disaster contingency fund will likely cover the state’s share of nearly $41 million in summer storm damage until the Legislature reconvenes in January 2015, according to analysis by state officials.
The memo to Gov. Mark Dayton and legislative leaders from Minnesota Management Commissioner Jim Schowalter and and Budget and Homeland Security and Emergency Management Director Kris Eide outlines the plan to cover the $40.8 million in damages caused by severe storms and flooding following assessments from the Federal Emergency Management Agency.
According to FEMA, 37 Minnesota counties and three tribal governments qualify under the President’s Disaster Declaration, meaning the federal government will cover 75 percent of the damage costs, leaving the state on the hook for $10.2 million. Between staggered withdrawals from the $3 million allocated by the Legislature, and advances from the Department of Revenue, there will likely be no need to call the Legislature to a special session to allocate more disaster money.
“We anticipate the existing appropriation will be sufficient to reimburse communities for the 25% non-federal share of the FEMA Public Assistance payments due between now and January 20145.” The memo read, adding that priority will be given to areas that suffered more significant damages.
Read the entire memo here:
Minnesota property taxes will go down about $49 million for residents who qualify to state aids and credits this year, according to a new report.
The report by a nonpartisan legislative office shows that property taxes would go up $124 million without aids and credits, but new property tax and renters credits will more than offset the increases.
The report has set off a new round of high-stakes political fighting in St. Paul. Legislative Democrats have pledged to lower property taxes through more state aid to local governments and through direct property tax relief in the form of aids and credits.
In a letter to constituents, House Speaker Paul Thissen, DFL-Minneapolis, credited Democrats' work for lowering property taxes for the first time in 12 years.
Homeowners will get some of the largest reductions in property taxes in 2014, about $171 million, or about 5.2 percent lower than last year. But owners of agricultural property, public utility land and commercial property could see their property levy edge up.
Republicans are zeroing in on a similar property tax report for 2015. That report shows property taxes will go up next year, even with aids and credits. However, analysts caution the 2015 numbers are highly speculative and make a rough guess and what local governments will do with their property tax levies.
“We knew farmers and rural landowners were going to be hit hard with property tax increases, but now it appears that homeowners in all tax brackets can expect to pay more despite promises the Democrats made over the past two years,” said state Rep. Paul Torkelson, R-Hanska, who sits on the House Property and Local Tax Division.
Minnesota’s property tax rates are a combination of levies of local government, schools and the state, which means they can vary wildly from community to community.
“The Democrats raised taxes on Minnesotans by more than $2 billion, and vowed this would actually help property taxes go down,” said state Rep. Greg Davids, R-Preston, ranking Republican on the House Taxes Committee. “This report proves they didn’t keep their word and now Minnesotans are going to pay an even steeper price.”
The lead author of the report cautioned that the figures for aids and credits are only estimates based on their best guesses as to how many Minnesotans apply for the tax relief.
The year-to-year comparison for actual taxes paid between 2013 and 2014, the numbers Republicans are highlighting, are the only numbers analysts know for sure, said Steve Hinze, a legislative analyst in the research department of the Minnesota House of Representatives.
Calculating aids and credits, as Democrats are counting on, gets murkier, he said.
The numbers “are actually pretty speculative because there is a new initiative aimed at getting more eligible taxpayers to apply for refunds this year, and no one really knows how successful it will be,” Hinze said.
Democrats say the only number that matters is what Minnesotans actually pay, which will be lower once they receive their aids and credits.
Many Democrats are especially happy that the some of the steepest tax reductions for homeowners and renters are in the rural areas.
Rep. John Persell, DFL- Bemidji, wrote a letter reminding constituents that property taxes were soaring as former GOP Gov. Tim Pawlenty cut millions from local governments.
Now, he said, legislators and DFL Gov. Mark Dayton “moved Minnesota in a different direction” and are lowering property taxes for the first time in years.
Republican gubernatorial candidate and former House Speaker Kurt Zellers is claiming credit for getting DFL Mark Dayton to “surrender” after the government shutdown three years ago.
"Democrats, political pundits, special interest groups, and even many Republicans predicted that we wouldn't hold to our principles," Zellers said Monday, marking the three-year anniversary of the end of the shutdown. "But I did not surrender and the GOP legislative majorities did not cave. Instead, it was Governor Dayton who surrendered to us after two weeks."
Dayton and the Republican-led Legislature could not agree on the budget and sent the state into a three-week partial government shutdown, the longest in state history. The state faced a multibillion-dollar deficit and the two sides could not agree the best way to patch up the budget.
Dayton wanted more than $2 billion in tax increases mostly on high earners. Zellers and other Republicans refused to raise taxes and instead wanted to borrow money from K-12 public schools and sell bonds backed by the state’s tobacco settlement.
Dayton eventually agreed to accept the Republican plan, though remained sharply critical of the borrowing.
While Dayton did not get his way in the shutdown, Minnesota voters jettisoned enough Republicans in the next election to give Democrats control of both the House and the Senate. Zellers lost his leardership position, too.
After their historic gains, Dayton and legislative Democrats eventually did raise taxes on high earners and smokers to balance the state budget. The economic recovery allowed to state to repay all of the money borrowed from public schools.
Zellers said he still believes the tax increases were bad for Minnesotans.
"I understood that it was wrong to force middle-class families to pay more for government during an economic downturn,” Zellers said. "I'm the only candidate who has proven his strength and his commitment to conservative principles to be able to beat Dayton and the liberal interest groups again in November."