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State Representative Barb Yarusso
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-0141
For more information contact: Susie Merthan 651-296-2955
E-Update
2013 Session Update: Omnibus E-12, Higher Education and Tax bills have been passed
Dear Neighbors,
This week the House has passed several omnibus budget bills including the E-12 Education Finance bill, the Higher Education Finance bill and the Tax bill. These bills will now move to conference committee, where differences between the House and Senate versions will be worked out.
Our education proposal sets the goals of closing the achievement gap, reaching a 100 percent high school graduation rate, 100 percent literacy by third grade, and 100 percent career and college readiness by graduation. These goals are ambitious but we cannot give up on any of our students.
This has been the “education session” and we have been working to address the fact that Minnesota has the 3rd highest class sizes in the country and has slipped from 10th to 22nd in school funding. Our goal is to build the world’s best workforce in Minnesota and in order to do this we are implementing new reforms and investments.
In addition to providing all-day kindergarten, early childhood learning scholarships and increased per pupil funding, the education bill will eliminate high stakes testing and move the focus towards career and college readiness. Under the new system, students at all levels will be directed and challenged based on their skills, interests, and individual post-secondary goals. Schools like Irondale are leading the way in these new methods to assess our students and prepare them for the 21st century workforce.
In addition to the E-12 Education Finance bill, the House passed the Higher Education bill on a bipartisan vote of 86 to 44. The bill will directly benefit students by freezing tuition at both the University of Minnesota (U of M) and the Minnesota State Colleges and University system (MnSCU). The proposal also includes new reforms to expand legislative oversight of state higher education institution spending, designed to better hold the U of M and MnSCU accountable for controversial budgeting practices such as high administrative costs and excessive compensation for top administrators. The Higher Education Committee held fourteen hearings on the topic of oversight in response to the dramatic increase in student tuition, fees, and debt over the past six years, student-to-faculty ratios, and administrative costs and trends over the past decade.
As you may have heard, the House passed the Tax bill Wednesday on a vote of 69-64. This proposal fully pays back the $854 million owed to schools due to previous borrowing, closes the $627 million budget deficit, provides direct property tax relief to 1 million Minnesotans and balances the budget into the future by using new revenue and reforms.
The tax bill provides $270 million in middle class property tax relief through a new Homestead Credit Refund, retooled renters’ credit and increased funds to cities and counties. 380,000 homeowners and renters throughout the state will receive a refund increase. An association of 16 suburban communities comprising of over 800,000 residents and over half a million employees have endorsed the property tax relief provisions in the tax bill. In addition to this tax relief a provision in the E-12 Education bill, referenced earlier, provides equity support to communities statewide to support schools and reduce the need for local levies and property tax increases.
The bill will raise the income tax rate, last raised in 1991, to 8.49% on the wealthiest 1.1% of individuals (taxable income greater than $400,000 per year for joint filer). Non-partisan fiscal analysis has found that the surcharge and 4th tier will affect fewer than 1 in 30 small businesses, or 3.3 percent. The bill also eliminates corporate loopholes that allow corporations to shelter profits overseas and eliminates other subsidies that are no longer effective.
Other tax changes include the affiliate nexus, which levels the playing field between Minnesota bricks and mortar retailers and online retailers, the Angel Investor Tax Credit and the Historic Credit. These provisions are intended to help out small and medium sized businesses.
The last revenue piece of the bill will increase user-based fees on alcohol and tobacco, helping recover state costs associated with their use. User-based fees on alcohol will be increased by 7 cents per serving of beer, wine, or liquor. Wholesalers argue that the actual increase paid by consumers would be more, but this will only happen if distributors choose to mark up their costs and use the tax increase as cover. The alcohol tax was last raised in 1987. The fee on cigarettes will go to $2.83 per pack. Each year, the state spends billions in alcohol and cigarette related health and public safety costs.
Please contact me anytime with your questions, comments and concerns. I appreciate your input.
Sincerely,
Barb Yarusso
News Items
- 2013 Session Update: Legislative Wrap-Up - (Posted: May 30 2013 4:52PM)
- 2013 Session Update: Jobs, Higher Education, Public Safety and Health and Human Services bills pass - (Posted: May 17 2013 10:11PM)
- 2013 Session Update: House passes anti-bullying and minimum wage legislation - (Posted: May 7 2013 8:54AM)
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