Dear Neighbor,
With a little more than one week to go in the 2017 session, the Legislature this week has approved numerous finance packages and sent them to the governor for his decisions. The remaining few should follow soon, giving us a full set of bills for our state’s next two-year budget.
Two of the most important bills we have sent the governor this week are on taxes and transportation. The tax bill includes $1.15 billion in relief over the next two years, including a $218 million reduction on the state tax on Social Security income.
Minnesotans have worked hard to generate the state’s budget surplus and it is time to recognize that and reduce their burden. Meaningful tax relief remains a top issue of mine in the House and I will keep working to make this happen. The people of Minnesota know better than government how to spend their own money.
Highlights of the bill include:
- More than $70 million to address college affordability through a first-in-the-nation tax credit for student loan payments, along with subtractions and credits for families saving for college using 529 Savings Plans. 65,000 students will receive an average of a $414 reduction in their taxes through a tax credit for student loan payments.
- $35 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service.
- $36 million for families with young children by modifying the child and dependent care credit. A family of four making $50,000 a year will receive an additional $1,200 towards their child care expenses.
- $126 million in relief for hometown businesses by exempting the first $150,000 in property value from the extra tax on businesses and freezing its automatic inflator.
As for transportation, the House also approved a compromise agreement to invest $5.5 billion over the next 10 years in the state’s transportation needs without raising taxes. The plan includes $2 billion for roads and bridges in the next two years.
The proposal uses transportation-related state tax revenues to invest $372 million in new dollars for roads and bridges. Additionally, the transportation proposal would fund:
- $20 million in FY18/19 for Small Cities Assistance Program for cities under 5,000
- $25 million to fund over 97 bridges on MNDOT's priority list
- Statewide investment in roads: $150m in trunk highway, $70m for counties, $22m for cities
We can fund improvements for our roads and bridges without a gas-tax increase and this bill allows us to do that with existing tax revenue. It is encouraging the governor has said he is now open to our approach, so we’ll see what shakes out.
It will be interesting to see how these and other issues develop between now and our May 22 constitutional date of adjournment. Stay tuned for more news as things unfold.
Sincerely,
Matt