Dear Neighbor,
The House has begun the process of bringing a series of bills to the floor that fund various areas of our state budget for the next two years.
A package of $1.35 billion in tax relief was the first omnibus finance bill to come to the full House and it was approved on Thursday. The top item of tax relief in the bill is $270 million to reduce the state tax on Social Security income.
Tax relief is one of the things I am most focused on in the House and this proposal is a good start in the process of lessening the load on Minnesotans. One of the best parts of this bill is that it would provide some relief for seniors. It just seems wrong that Minnesota is one of just a very few states that fully taxes Social Security income.
The House majority has been talking about doing things the Minnesota Way this session and one of the best places to start would be by doing what’s right for our seniors.
The bill also includes a provision I authored to help get the most out of broadband grants. It would increase the effectiveness of broadband grants would expand the sales tax exemption for telecommunications equipment to include wire, cable, fiber, poles, and conduit for telecommunications services.
Paul Bunyan Communications, for example, would have saved an estimated $200,000 last year alone and been able to put that money toward expanding broadband in our region if not for state sales taxes being skimmed off the top. If the state is going to issue grants for the purpose of expanding broadband, then let’s keep those grant dollars on the project instead of sending back to the state.
Other tax relief provisions in the bill include:
- $35 million going toward modifying the child and dependent care credit. A family of four with childcare expenses would be estimated to receive $660 in relief.
- More than $125 million would go toward addressing college affordability. Families saving for college using 529 Savings Plans will benefit from expanded subtractions and credits. In addition, 77,500 students will receive, on average, a $640 reduction in their taxes through a first-in-the-nation tax credit for student loan payments.
- $203 million to reduce the extra state property tax on businesses, exempting the first $200,000 in property value from the extra tax on businesses. Note: This is a tax that hurts Minnesota’s competitiveness, particularly in rural Minnesota. As it stands today, our state holds the second-highest ranking in the country when it comes to commercial and industrial tax rates. Remember, the state general tax is in addition to the normal property tax obligations they pay for schools, county, cities, townships, etc. It costs them nearly $1.8 billion each biennium and, unbelievably, it is sent directly to state government for its use on government programs. There literally is no local benefit.
- $42 million to reduce the burden agriculture land owners pay for school bond referendums. Farms also would benefit from a measure conforming the state death tax to the federal exclusion.
The House also approved a bill related to the environment and natural resources. The goal with the bill is to improve government agency transparency through reforming the funding process of the Minnesota Pollution Control Agency by requiring more detail on where and how efficiently funds are being used, and by reforming the permitting process of the Department of Natural Resources and the MPCA.
Some other reforms in the bill include:
- Delaying the implementation of the buffer law from 2017 to 2018.
- Improving the sustainability and productivity of the state’s timber industry.
- Prohibiting the DNR from further restricting the use of lead shot.
- Raising the criminal penalty for those who poach to the point of being grossly over limits.
More finance bills are coming to the floor today and throughout next week. Transportation and K-12 education are two areas we anticipate coming up for votes as soon as today. Look for more on those soon, including legislation I have been fighting hard to keep in the K-12 bill which would provide funding to help make up for a busing shortfall in our area.
Stay tuned and, as always, your feedback is welcome.
Sincerely,
Matt