Saint Paul, MN. – Today the Minnesota House of Representatives announced the 2023 House Tax Bill. Collectively, the bill delivers the largest tax cut in state history with credits, rebates, and other provisions designed to maximize benefits for workers, families, and seniors. It also addresses years of rising property taxes and underinvestment in local communities. These critically needed provisions are paid for through the state’s historic surplus and new revenue from multinational corporations and the very wealthiest in the state.
“The Taxes Committee has worked hard all year to craft a progressive tax budget which invests in the Minnesotans who need it the most, while maintaining fiscal responsibility and sound management. Our budget accomplishes this and more, creating a Minnesota where those who received the least profit and financial gain over the past few years are returned the aid they deserve,” said Rep. Aisha Gomez (DFL - Minneapolis), Chair of the House Taxes Committee. “We have a very strong bill here which will make Minnesota a better and more equitable state. I look forward to working with my Senate colleagues to pass a bill which includes our most impactful provisions.”
Minnesota has experienced a stellar economic recovery since the COVID-19 pandemic, but this has not been felt equally. Workers, families and seniors have experienced tighter budgets as wages have failed to match rising costs. That’s why the House DFL Tax bill prioritizes these Minnesotans. The bill includes full Social Security state income exemption for those earning less than $100,000 annually (married/joint) or $78,000 (single/head of household). It also includes direct rebates of $275 per person, with an additional $275 for each dependent (up to three) reaching more than 2,562,300 Minnesotans to help them meet day-to-day expenses. In a strong show of support for families, the bill provides for a new and simplified Child & Working Family Tax Credit of up to $1,175 per child which will impact more than one million families and reduce child poverty by 22.9%.
“With a historic budget surplus, we are bringing forward the largest tax cuts in state history. Our bill contains tax cuts in the form of credits, rebates, and other provisions that will help Minnesota workers, families, and seniors,” said Speaker Melissa Hortman. “The House DFL budget invests in Minnesotans' priorities of education, health care, economic security, and the safety and vitality of our communities. With much of the surplus being one-time money, investing in these areas now and into the future requires an ongoing commitment. We’re proposing to make the tax code more fair and more progressive to provide sustainable funding for education, health care, transportation, and so much more.”
As state and federal governments have been unable to fully fund various services, local governments have been forced to make up the difference in property taxes. Property taxes are regressive and have disproportionate impacts on Minnesotans with low or fixed incomes. The House DFL’s Tax bill delivers $648 million of property tax cuts and direct assistance to local communities, including measures to reform the Renter’s Property Tax Refund program, incorporating the credit onto income tax filings, resulting in an additional $378 million back to renters over the next two years. The bill also includes expansion of the Homestead Credit Refund, targeting an additional $41 million of assistance over the biennium to homeowners who will benefit the most. It also contains an additional $100 million for Local Government Aid and $100 million for County Program Aid to help local communities deliver critical public services while keeping property taxes in check.
“The Property Tax pieces of this legislation will truly benefit workers, young families, seniors, those who rent a home, and those who own a home, while ensuring everyone can enjoy the critical public services we all count on, like police officers, fire services, and clean water,” said Rep. Dave Lislegard (DFL - Aurora), chair of the House Property Tax Division. “Overall, this package encompasses numerous solutions to help folks who are experiencing rising property taxes and delivers strong investments in families, neighbors, and communities all across this great state.”
The recent economic recovery has been vastly disproportionate resulting in unprecedented inequality. In order to lift up the Minnesotans who need and deserve it the most the House DFL Tax Bill implements two new tax fairness measures. The first is a millionaires tax on the top .8% of earners a new highest rate of 10.85% for those earning $1 million (married/joint), $600,000 (single) or $800,000 (head of household). The second is a worldwide reporting requirement for multinational corporations, allowing Minnesota to close a loophole and rightfully capture corporate profits hidden in offshore tax havens. These increased contributions are integral to making a stronger and more equitable Minnesota.
The House Taxes Committee will hold an overview at its meeting on Monday, April 17th, at 1 p.m., will receive public testimony on Tuesday, April 18th, at 9 a.m. and will mark up the bill on Wednesday, April 19th, at 9 a.m.
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