Saint Paul, MN. – Today, the Minnesota House of Representatives passed HF 1938, 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.
“This is a tax bill focused on putting money back in the pockets of working-class families and seniors. It addresses many of the issues I’ve heard about from my district and that I’ve been leading on at the State Capitol as vice chair of the Tax Committee.,” said Rep. Matt Norris (DFL - Blaine), Vice Chair of the House Taxes Committee. “In our schools, we’re seeing a ‘K-shaped recovery’ from the pandemic. More affluent students have fully recovered their lost learning while lower income students, whose families can’t afford the same enrichment services, are falling further behind. That’s why I'm particularly pleased that my bill to update the income limit for the K-12 Education Tax Credit for the first time in 26 years is included.”
The Tax Bill includes two critical provisions to cut property taxes authored by Rep. Norris. The first supercharges the Special Homestead Property Tax Refund, which gives a refund to homeowners who see a big year-over-year spike in their property taxes.The second raises the property value limits for the Homestead Market Value Exclusion, which haven’t been updated since 2012.
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. For example, the city of Lexington in Rep. Norris’s district would receive an additional $119,303 in Local Government Aid, an increase of more than 25%.
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%.
Video of the floor debate will be uploaded to the House Information Youtube page.
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