Dear Friends,
I'd like to take a moment to update you on where things stand post-session.
Supplemental Budget Bill
Last week, Governor Dayton signed the supplemental spending bill into law. As I have mentioned before, the supplemental budget proposal allocates an additional $158 million dollars to preschool early learning grants, mental health resources, broadband infrastructure, economic disparities, higher education, and resources to combat sex trafficking.
Notably, this bill makes veterans' retirement benefits completely tax-exempt. Minnesota will join just 12 other states that do not tax any part of military pensions. This is so important, and will benefit the over 18,000 retired military men and women who currently live in our state. We also hope it will encourage more of our soldiers to raise their families and retire in Minnesota once they leave service. They are some of the greatest assets that our state has, both in our workforce and our communities, and this is a small way of showing Minnesota’s support for our military community.
As always, if you’d like more detailed information, here is a link to the House Public Information Services page for the supplemental budget bill, including footage of the House floor debate:
Tax Bill
After signing the supplemental budget proposal, the Governor announced that he would not sign our bipartisan tax bill unless two specific modifications were made to it in a special session.
The first change proposed by the Governor is a technical change of one word in the bill language.
The second proposed change is to reinstate the Minnesota State High School Leagues tax-exemption and have that money set aside for scholarships for low-income students, enabling them to participate in extracurricular activities. I was chief author of this provision in the House.
While I am happy that the Governor sees the importance of the State High School League proposal, it is hard to fathom why he would veto an entire tax bill that passed with support from 89% of the legislature. Regardless, House Republicans agreed to make these changes immediately in a special session, but Governor Dayton vetoed the bill on Monday night.
This tax bill was comprised of $800 million in middle-class tax relief over a three year period, $500 million of which would be permanent or ongoing. Provisions included the following:
•$90.6 million in tax relief for Minnesota farmers.
•$110 million in tax relief for college graduates paying off student loans
•$49 million in tax relief for families who contribute to 529 plans to save for their children's college costs.
•$146 million in tax relief for every small business in Minnesota
•$13 million in tax relief for Minnesota veterans
•$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
•Federal conformity provisions that allow Minnesotans to deduct higher education tuition expenses, mortgage insurance premiums, classroom expenses for teachers, charitable giving (for seniors), and more.
This proposal is the most bipartisan tax bill the legislature has seen in 30 years, and it’s unfortunate that Governor Dayton is willing to hold up important middle-class tax relief for an additional $500 million in bonding bill spending. The Governor has said he will not call a special session to pass the tax bill alone, but insists on a bonding bill agreement first. While the legislature decides when a special session is completed, only the Governor can actually call a special session to order, and at this point it seems he will require his spending demands for the bonding bill to be met before he will sign the tax bill.
I will keep you updated on the prospect of a special session as we move forward. As always, please contact me with any questions or concerns you may have!
Sincerely,
Roz