Targeting the middle class, House Republicans announced their intent to put forward a $1.35 billion package of tax relief for the 2018-19 biennium.
Calling it a work in progress, House Taxes Committee Chair, Rep. Greg Davids (R-Preston) said relief for the state’s middle class is long overdue and that the bill would target “a family with a newborn attending day care to senior citizens who worked hard to enjoy their retirement.”
The signature provision in the bill aligns with one of the governor’s priorities: property tax relief for farmers who carry a large share of the cost of school district bonding projects. The House would provide $42 million in relief toward that effort.
Rep. Steve Drazkowski (R-Mazeppa), chair of the House Property Tax and Local Government Finance Division, said this relief would benefit school districts seeking to replace aging infrastructure as well as farmers strapped with that cost and who are facing some of the lowest commodity prices in recent years.
The bill would target several groups with either credits or tax deductions, including:
Davids would prefer to totally remove state tax on Social Security payments, but noted that the bill would raise the income threshold for when taxes on that income would kick in. “This will help a lot of middle-class Minnesotans who won’t have to declare this income at a 15 percent rate,” he said.
Many of the bill’s provisions were in last year’s omnibus tax bill, which, while considered bipartisan, was vetoed over a drafting error that could have cost the state millions.
Davids said that the House bill, HF4, is a starting point, and noted the difference between the recently released Senate Republican proposal and the plan proffered by DFL Gov. Mark Dayton. The Senate is proposing $900 million in tax relief, while the governor is seeking $300 million.
If you want the bill to be enacted, it has to be bipartisan, he said. “You have to write a bill that will get that last signature.”
In a statement, House Minority Leader Melissa Hortman (DFL-Brooklyn Park) said the bill’s priorities are askew.
“Too many Minnesotans are working hard without getting ahead. They are faced with a lack of economic opportunity to build a better future for themselves and their families. Meanwhile, the rich, powerful, and well-connected continue to do better, while most Minnesotans don’t. This needs to change, and unfortunately the Republican tax bill likely won’t do that.
Davids is known for naming his omnibus tax bills with a song title.
He said this year’s title, “Come Together” by the Beatles, is directly aimed at seeking support from the state’s head executive for tax relief. Revised lyrics, to reflect his thoughts on the bill, are expected to be released when the House Taxes Committee discusses the proposal Thursday. Hortman responded a 1983 hit from Naked Eyes is more appropriate. “A better song for the Republican tax proposal would be, ‘Promises, Promises,’ because they are breaking their own promises to working families and the middle class.”