Nearly 1 million Minnesotans could see $103 million in tax cuts
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- May 8, 2014 - 5:15 PM
Nearly 1 million Minnesotans will get $103 million in new tax breaks as part of a measure finalized Thursday, with more than half devoted to direct property tax relief for homeowners, farmers and renters.
“We wanted to do it as direct as possible,” said state House Taxes Committee chairwoman Ann Lenczewski, DFL-Bloomington. Homeowners, renters and farmers will get “super-sized” rebates this year.
House and Senate DFL leaders have been working for weeks to agree on a tax relief package using the remainder of the state’s $1.2 billion projected budget surplus.
House Minority Leader Kurt Daudt, R-Crown, said there is strong bipartisan support for tax relief this session. He has not reviewed the measure in detail, but expected it would have at least some Republican support.
About 940,000 homeowners, renters and farmers will get additional tax relief as part of the new measure.
Legislators earmarked $17 million in property tax relief for more than 90,000 farmers. The average farmer in Minnesota will get $410 in direct property tax relief, an increase of about $200.
Homeowners will share $12.1 million in property tax relief and renters will get an additional $12.5 million in property tax relief for the year.
“There is a good balance of tax relief for everyone,” said Senate Taxes Committee chairman Rod Skoe, DFL–Clearbrook.
Legislators are devoting $4.5 million this year and $10 million next year to control invasive species at public-access boat landings.
The House and Senate also want to create a pilot project to help retention and recruitment of volunteer first-responders. Volunteers in 14 qualifying counties will get a $500 stipend to stay with their squad.
Military income paid to National Guard members, whether active duty or reserve, will be tax free, under the proposal.
Parents of students struggling with reading can get a tutoring credit of up to $2,000 a year. The proposal also changes the timing of when businesses can submit sales tax payments, easing cash flow problems for many businesses.
The measure also includes more than 80 pages refinements and changes to clean-up the tax code. Modernizing of the state's tax law is part of Gov. Mark Dayton’s massive government streamlining effort he launched earlier this year.
The measure does not include an expansion of the childcare credit, a provision Dayton has pushed for strongly.
The governor wants to expand the child tax credit to all families, not just low-income families. Doing so would increase the costs from $15 million a year to nearly $74 million.
House Speaker Paul Thissen, DFL-Minneapolis, said the tax credit is good policy, but too expensive to tackle this legislative session.
The House and Senate are expected to pass the tax measure next week, likely with strong bipartisan support.
This is the second tax relief measure of the session. All told, more than 2 million Minnesotans will get a total of $550 million in tax relief if the new measure becomes law.
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