Dayton signs tax relief bill; more than 1.2M will see tax breaks
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- March 21, 2014 - 6:17 PM
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.”
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