Tax relief focus of House budget targets

(Updated with committee vote) 

Looking to piggyback on last year’s action, House Republicans announced budget adjustment targets for this session. Tax relief tops the list.

“2017 was the most productive legislative sessions in modern history. Our Republican-led legislature delivered significant tax relief and a major investment in roads and bridges. These 2018 budget adjustments continue our strong commitment to Minnesota families through tax relief, roads and bridges, and school safety,” House Speaker Kurt Daudt (R-Crown) said in a statement.

The House Ways and Means Committee approved a resolution setting the targets Thursday evening on an 18-6 vote that crossed party lines.

We set a two-year budget last session but issues come up that need to be addressed, said Rep. Jim Knoblach (R-St. Cloud), who chairs the committee. As examples, he listed school safety and more money for tax conformity

"Today’s budget adjustments reflect our shared values. In addition to school safety, tax conformity, and transportation infrastructure, we also make needed investments in mental health for our farmers, efforts to combat the opioid crisis, and care for our disabled community," House Majority Leader Joyce Peppin (R-Rogers) said in a statement.

The state has a $329 million projected budget surplus for the remainder of this biennium, Minnesota Management and Budget announced in late February.

Here are the spending increases proposed by House leaders:

• $107.45 million in tax relief, including simplification of state taxes;
• $101 million for road and bridge repairs;
• $50.6 million to address a variety of issues, including pension woes;
• $30.23 million for student safety through school safety improvements and mental health programming;
• $15 million for expanded broadband internet across the state;
• $10 million to prevent a 7 percent cut to people caring for Minnesota’s disabled community through the Disability Waiver Rate System;
• $7.12 million for public safety;
• $5 million for higher education;
• $750,000 to address chronic wasting disease; and
• $250,000 to support mental health counseling for farmers.

The target calls for a $7 million cut in state government funding, with efficiencies to be determined by the House State Government Finance Committee. However, Knoblach said the resolution would take nearly $30.82 million from the stadium reserve balance. That account is within the state government committee’s jurisdiction.

A nearly $9 million investment will allow for an $825 million capital investment bill, far less than the $1.5 billion proposal offered by Gov. Mark Dayton nearly three months ago. Additionally, some projects that are not eligible for bonding dollars could be paid for with some of the investment.

Traditionally, even-numbered sessions are focused on a capital investment — or bonding — bill; however, a nearly $1 billion law was enacted last year.

Further, the resolution calls for $75 million in unspent funds from the 2017 Premium Rebate Program go into the state’s budget reserve.

A trio of DFL-offered amendments were rejected: $28.5 million more for capital investment, $15 million to help with the costs of higher education and $9.6 million for E-12 education. Each would have taken money from budget reserves.

The 2018 session must conclude by May 21.