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State Representative Andrew Falk
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4228
For more information contact: Sandy Connolly 651-296-8877
NEWS COLUMN
HOUSE PASSES BALANCED BUDGET, STRATEGIC CUTS AND FAIR REVENUE INCREASES
Dear Friends and Neighbors,
Today, I write this column from the floor of the Minnesota House of Representatives. This is an incredibly exciting, enlightening, enduring, and albeit, at times frustrating endeavor. For the last two weeks, we have been debating our House finance omnibus bills. In each area of the budget, we have brought forward an omnibus finance bill that funds the respective area of the state government in a responsible and fair manner. Nearly every area of the budget has been forced to take a hard cut to its base budget (the exceptions being education and veterans’ services). For the first time in our state’s history, the next biennium's budget will be smaller than the previous biennium. In fact, the House DFL caucus has proposed a balanced budget that makes strategic cuts that will make government more accountable and more efficient. These were hard and difficult decisions to make but in doing so, we have proposed a balanced budget.
In addition to making cuts, the House budget proposes to raise new sources of revenue in a more progressive and fair manner for all Minnesotans. For those wealthy Minnesotans (specifically those who file jointly and make over $300,000 net per year), we have proposed reinstating the fourth-tier income tax. More specifically, those joint-filers’ taxes would go from 7.85% to 9.00% for every dollar made in excess of $300,000 net.
Another major aspect of the House omnibus tax bill is a change in the state mortgage interest tax deduction. Currently, 54 percent of Minnesota homeowners do not itemize their Minnesota income taxes, and consequently, do not receive any benefit from the state mortgage interest deduction. The House omnibus tax bill instead creates a Mortgage Interest Credit, under which all homeowners would be eligible for a credit on the first $10,000 of their mortgage interest. Unlike a tax deduction, which only reduces the total amount of taxable income, a credit is a dollar-for-dollar decrease in taxes due. Under current law, two individuals with identical homes and identical mortgages receive different tax breaks: the wealthier individual receives the bigger break.
The House Omnibus Tax Bill (only voted for by Democrats) proposes a new credit offering the same tax benefit to both individuals. This is one of the more fair and more progressive tax provisions that will have a real impact on working families and help bring our state back into fiscal balance.
Please feel free to call me if you have any questions about what is happening at the state legislature. I can be reached at 651-296-4228 or by email at rep.andrew.falk@house.mn. I look forward to hearing from you.
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