Legislature focuses on tax plan
The House and Senate tax bills are gaining momentum this week. Senate Republicans unveiled their tax plan on Tuesday, proposing a cut in state income taxes and a mechanism for automatic future cuts. Senate legislative leaders have said their tax bill would protect all but 2,500 Minnesotans from tax increases, following last year’s overhaul of the federal tax code.
Sen. Roger Chamberlain, R-Lino Lakes, chair of the Senate Tax committee, said the bill would protect 99.8 percent of state tax filers. He said an estimated 2.1 million would see tax cuts of up to $150, and 470,000 would see no change. “We need reform, we need tax relief for this state, we need economic growth,” Chamberlain said.
The Senate bill reduces the first income tax tier from 5.35 percent to 5.1 percent. Deductions for charitable donations, mortgage interest and property taxes would remain, as would the state standard deduction of $13,000. The state personal and dependent exemption would also be preserved. The bill also establishes triggers that would automatically reduce the income tax rate and corporate rate when there’s an adequate budget surplus.
The Senate proposal will be discussed in the Senate Tax committee this morning.
The House passed their tax bill off the floor Monday by a vote of 90-38. While the House bill is similar to the Senate proposal, there are also key differences, including the House bill proposes to cut the rate for the second lowest income tax tier. Other provisions in the House bill would alter the base Minnesota tax code calculation from federal taxable income to adjusted gross income; put Minnesota in full conformity with federal Section 179 spending; allow businesses to deduct the cost of certain property as an expense, instead of requiring the property cost to be capitalized and depreciated; authorize $10 million in small business investment tax credits, or “angel credits;” repeal the political contribution fund program, which offers individuals a state-paid refund of their candidate contributions up to $50 a year; consolidate most residential property types into a single classification; create a sales and property tax exemption for medical facilities located in underserved areas; and provide a number of sales tax exemptions for various construction projects.
The Legislature has just under three weeks to work through the differences in the House and Senate tax bills and come to an agreement with Governor Dayton.
Governor proposes K-12 emergency funding
Governor Mark Dayton asked Minnesota lawmakers Tuesday to consider an increase in school funding this session to help with layoffs and program cuts. As school districts work on their budgets for next year, many have indicated the need to reduce teachers or staff, increase class sizes, close buildings and eliminate extracurricular activities.
Dayton is asking lawmakers for $138 million in one-time
emergency aid
to increase school resources by 2 percent in the coming year, which would amount to an additional $126 for every student in public school. Dayton said it would help schools get by until a new state budget is adopted next year.
House Education Committee Chair Jenifer Loon, R-Eden Prairie, said Dayton’s approach applies a broad-based solution to a narrower problem. “I think we need to look at this on a case-by-case basis,” Loon said. Loon said that if enrollment is declining in some districts, difficult adjustments need to be made. Education Commissioner Brenda Casselius said if schools have to make cuts now, it will be hard to recover later. “This one-time emergency funding is most definitely a need,” Casselius said.
______________________________________________________________________
This Week at the Capitol
Wednesday, May 2
8:30 a.m.
Senate Finance
Room: 1200 Minnesota Senate Building
Chair: Sen. Julie Rosen
Agenda: S.F. 3437-Housley: (BILL ADDED) Eldercare and Vulnerable Adult Protection Act of 2018.
8:30 a.m.
Senate Taxes
Room: 15 Capitol
Chair: Sen. Roger Chamberlain
Agenda: S.F. 3982-Chamberlain: Tax provisions modifications; appropriation.
Public testimony on S.F. 3982 as amended and Chair markup.
10:00 a.m.
House in Session
CALENDAR FOR THE DAY
SF3306 (O'Driscoll) Campaign finance additional definitions; disclosure, independent expenditures, non-campaign disbursements, reporting, coordinated and non-coordinated expenditures, and miscellaneous campaign finance modifications
SF3525 (O'Driscoll) Metropolitan Airports Commission (MAC) political subdivision compensation limit exemption
SF2777 (Pugh) Deaf, Deaf-Blind, and Hard-of-Hearing Minnesotans commission provisions modification
SF3466 (Nash) Motorcycle operating requirements for individuals possessing a two-wheeled vehicle instruction permit modification
HF3265 (Kresha) Child foster care training requirements modified, and foster care sibling bill of rights established
HF1876 (Swedzinski) Trade associations permitted vehicle registration information access
HF3232 (O'Neill) Solar energy incentive program modified
HF4157 (Quam) Claim settlement provided, and money appropriated
10:30 a.m.
Senate in Session
After Legislative Session or at the Call of the Chair
House Ways and Means
Room: 5 State Office Building
Chair: Rep. Jim Knoblach
Agenda: HF1609 (Smith): Revised Uniform Law on Notarial Acts enacted
HF3856 (Swedzinski): Well and boring provisions modified
HF4425 (Miller): Rural Finance Authority funding provided, bonds issued, and money appropriated
HF3688 (O’Driscoll): Energy improvements program modified, consumer protections for residential property assessed clean energy loans provided, and remedies provided
Thursday, May 3
4:30 p.m.
Joint Meeting: Senate Higher Education Finance and Policy; House Higher Education and Career Readiness Policy and Finance
Room: 5 State Office Building
Chairs: Sen. Michelle Fischbach and Rep. Bud Nornes
Agenda: Meeting to nominate a University of Minnesota Regent for the 1st Congressional District to the Joint Convention of the Legislature
