Hello from the State Capitol,
A number of supplemental budget bills were approved with strong bipartisan support in the Minnesota House late last week.
Included was a proposal that simplifies Minnesota’s tax code and provides additional tax relief to middle-class Minnesotans.
I joined the bipartisan majority in passing the legislation, which would prevent headaches for tax filers next year and make the first income tax cut in nearly 20 years.
Along with middle class tax relief, it’s important for us to help mitigate some of the changes that were made at the federal level. One of the more important provisions for farmers and small business owners in southwestern Minnesota is the tax conformity on Section 179 deprecation. That has been a long standing issue as depreciation is viewed differently in the eyes of the federal and our state government, and this proposal would make things easier next tax season.
Under the House bill, more than 2.1 million Minnesota filers will benefit from a tax cut in tax year 2018.
Other highlights include:
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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.
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Lowering taxes for people at all income levels by increasing the standard deduction from $13,000 to $14,000.
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Protecting families by preserving a state personal and dependent exemption of $4,150.
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Encouraging affordable homeownership by allowing a state-itemized deduction of up to $30,000 in property taxes.
We also approved health and human services legislation that restores funding for the Disability Waiver Rate System (DWRS). Specifically, the proposal would reinstate a looming seven percent cut for home and community-based service (HCBS) providers through DWRS. It would invest money through grants to ensure providers would be made whole as of July 1, 2018, when the seven percent cut takes place, until the federal Centers for Medicaid and Medicare Services (CMS) could approve a new waiver. That new waiver will provide an increase in the base rate formula used to calculate DWRS rates.
One of our main objectives with this bill was to restore a 7% cut to our disability community. Those who work day-in and day-out with consumers are already underpaid for their work, and further cuts because of a definition issue exacerbated their challenges. Our bill provides a long-term fix that prevents rate cuts starting July 1.
Have a good week,
Joe