Dear Neighbor,
The Legislature has been adjourned for two weeks and I have waited to get you an e-letter hoping I could add definition to what you may have been hearing in the news. Although the governor did sign the supplemental spending bill we are still awaiting his approval of $801 million in tax relief. That bill would help everyone from farmers to veterans, recent college grads, working families, and small business owners.
The tax bill awaiting the governor's action received strong bipartisan support in passing the Legislature (123-10 in the House), yet the governor is citing a technical error as his source of reluctance to sign it into law. The fix is as simple as changing an "and" appearing where an "or" should be in a provision related to bingo halls. The legislative intent was clear and all seem to agree it can and should be fixed in the same manner many of these technicalities have been handled in the past, (which is relatively easy and has precedent) so it’s hard for me to tell you if the hold-up is the technical change, or there if there is some other motivating factor involved.
The governor has until the end of today to approve the bill, otherwise it expires and becomes subject to a pocket veto. It would be disappointing to see such important tax relief in the bill which was overwhelming supported by both houses of the legislature fall by the wayside. In the next three years, the plan provides tax relief in the amounts as follows:
- $90.6 million in agriculture property tax relief for Minnesota farmers by having the state budget help support local school capital referendum levy needs
- $110 million in tax relief for college graduates paying off student loans through a refundable tax credit up to $1,000, the first of its kind in the country.
- $49 million in tax relief for families who contribute to 529 Plans to save for their children's college costs.
- $146 million in property tax relief for every small business in the state by exempting the first $100,000 of commercial-industrial property – a real plus for greater Minnesota main street preservation.
- $13 million in tax relief for veterans by raising the income eligibility threshold, and increasing the total credit from $750 to $1,000.
- $150 million in tax relief for working families by expanding the working family tax credit.
- $32 million to reduce the cost of childcare; by expanding the childcare tax credit families could earn a tax credit up to $960.
- Numerous conformity provisions with IRS rule which both help save money, and make filing more consistent and easier
Since things will probably remain “fluid” over the next few weeks I will pass along more information as details emerge. I will give you an update on the capital investment bill later as that bill continues to still have a uncertain future, and I don’t think at this point I could add much to your understanding of how it will ultimately unfold.
To end however on a positive note, as referred to above the governor did approve a supplemental finance bill last week. One of the most noteworthy provision in the omnibus package repeals the state tax on military retirement income. This will benefit an estimated 18,000 retired veterans living in Minnesota. Minnesota has been one of very few states to fully tax military retirement pay. The hope is this change will make our state a more welcoming place for veterans to reside and start a second career, and from my standpoint was one of those satisfying things we can take away from the session.
Sincerely,
Bob