Friends,
It's been another busy week at the Capitol. We've passed a number of our key bills for this session, including the Tax Conformity bill on Monday. Read about that and more below. Have a great weekend.
Tax Conformity Bill Passes House
On Monday, April 30, we passed bipartisan tax legislation on a vote of 90-38. The House tax proposal simplifies Minnesota’s tax code to fully benefit from federal tax reform and provide additional tax relief to middle-class Minnesotans.
This bill delivers the first income tax cut in nearly 20 years by reducing the second tier income tax rate and preserves many of the tax breaks Minnesota families use. We are committed to getting a tax conformity bill done this year so Minnesotans won't face headaches when they file their taxes next April. Without House Republican reforms, conforming to the federal tax code would cause almost 1 million filers to pay more.
As a result of House Republicans’ proposal, more than 2.1 million Minnesota filers will benefit from a tax cut in tax year 2018. Highlights include:
- Helping middle-class Minnesotans keep more of what they earn by cutting the second tier income tax rate from 7.05% to 6.75% by tax year 2020. This would mark the first income tax rate reduction in Minnesota since 2000.
- Lowering taxes for people at all income levels by increasing the standard deduction for all filers.
- Protecting families by preserving a state personal and dependent exemption of $4,150.
- Encouraging affordable homeownership by allowing a state-itemized deduction of up to $30,000 in property taxes.
- Supporting hometown businesses and farmers by reinvesting extra revenue from corporate tax changes into Section 179 conformity and overall rate reductions.
In contrast to House Republicans’ legislation to simplify and reduce taxes, an analysis conducted by the Minnesota Department of Revenue shows that tax changes proposed in the governor's supplemental budget would raise taxes on Minnesotans of every income level, and make Minnesota's tax code more regressive.
The contrast with Governor Dayton is stark: The Governor is proposing more than a billion dollars in tax hikes on health care, small businesses, and thousands of Minnesota families while we are focused on lowering income tax rates and preserving tax breaks for Minnesotans.
I’m glad that we could do tax conformity, and provide tax cuts to over 2 million more Minnesotans than the governor’s proposal. The depreciation provisions for farmers is great timing during a difficult period for farmers.
Veterans Home Funding Passes House
The House Republicans’ State Government Finance proposal that passed the House this Thursday ensures the state is focused on Minnesota’s priorities by funding the construction of three new veterans homes, dedicating cyber security funding, reforming the Met Council, and creating more transparency in government.
One of the new veterans homes will be in Preston. Veteran's in our area of the state will benefit greatly from having a veteran's home in Preston. The southeast corner of our state has been lacking a veteran's facility like the ones included in the House's proposal and I am pleased we can provide our veterans with the care they earned serving our country.
The State portion of the funding for the veterans homes comes from the excess funds from the Vikings Stadium Reserve Account, the bill funds veterans homes in Preston, Bemidji, and Montevideo. The Vikings stadium reserve that is used to fund the veterans homes currently has an excess balance of $58 million. The reserve is expected to grow to $120 million by the end of fiscal year 2021. Under the bill, the stadium reserve account would be capped at 125% of the annual payments of the stadium bonds. The House bill ensures excess funds are put to use rather than sitting idle while still protecting against a drop in revenues. Currently, there is no cap on the amount of the reserve.
Meetings Since My Last Update
Since my last update, I had the great opportunity to meet with so many people and groups interested in what is going on at the legislature. This week I was able to meet with an advocate with Minnesota Environmental Partnership for Water Action Day on May 2nd.
Please continue to stay in touch to share your thoughts and ideas on issues important to you. You can schedule a time to meet with me in my office anytime by calling (651) 296-9236, or share your thoughts via email by emailing me at rep.duane.quam@house.mn
Have a great weekend,
Duane