Saint Paul, Minn. — Democrats in the Minnesota House of Representatives today announced a new tax proposal that reduces the cost of Minnesotans’ biggest expenses, like housing and child care. Democrats’ tax bill provides targeted benefits to people who need help the most such as workers, families, and senior citizens. In the Senate, Republicans have proposed a one-size-fits-all approach that would provide tax cuts for millionaires and billionaires and jeopardize the state’s budget in times of economic decline.
The House DFL tax bill reduces the cost of child care for Minnesota families by providing a tax credit of up to $3,000 for each child under five years of age, capped at $7,500 in total tax credits. It also provides a one-time “child tax credit rebate” of $325 for each child under 17 years of age. This means a family with three children under the age of five would receive nearly $7,000 in benefits.
“This is a ‘tax bill with a cause.’ We’re providing targeted and significant tax cuts to make a real difference in the lives of families, workers, and senior citizens by lowering child care costs, making housing more affordable, and cutting property taxes,” said House Tax Committee Chair Rep. Paul Marquart (DFL-Dilworth). “However, we can’t do any of those things if Republicans use the budget surplus to provide permanent tax cuts for millionaires and billionaires who don’t need the state’s help. Let’s make sure our surplus dollars go to the people who need help the most — our workers, families, and senior citizens.”
The House DFL tax bill helps those seniors who need the most support by ensuring no senior citizen with an annual income under $75,000 pays taxes on their Social Security benefits, at a cost of $114 million per year. It also helps seniors stay in their homes through significant property tax cuts by expanding property tax refunds for homeowners and renters.
“House Democrats are focused on reducing costs and providing help to those who need it the most: Minnesota workers, families, and seniors,” said House Speaker Melissa Hortman. “We can’t make progress for Minnesota’s future through tax cuts and giveaways for the wealthy and large corporations who are doing very well during this pandemic.”
Democrats’ tax proposal would reduce the cost of housing by devoting more funding to the state’s Renter’s Property Tax Refund program and Homeowner’s Homestead Credit Refund. Approximately 120,000 renters will save an average $700 on their housing costs. Statewide, 30% of renter’s credit recipients are seniors or people with disabilities. Nearly 400,000 homestead credit refund filers will receive on average $100 more. In addition, more than 1.3 million homesteads that currently qualify for the market value exclusion will see an increased exclusion, putting more dollars back into the pockets of workers and families. The bill also increases the student loan tax credit to $1,400 for each spouse.
“House DFLers are delivering the largest long-term investments in property tax cuts and renters’ credit in decades, as well as providing ongoing investments in communities across the state,” said Rep. Cheryl Youakim (DFL-Hopkins), chair of the House Property Tax Division. “These changes will put money back into Minnesotans' pockets at a time when they need it the most.”
The House Tax Committee is meeting this week to take public testimony on the bill, finalize bill markups, and pass the bill out of committee by the Legislature’s third committee deadline this Friday.