Dear Neighbor,
The final full week of the 2017 session is just around the corner and significant progress was made on budget bills this week.
Both the House and the Senate approved several omnibus finance bills in recent days and sent them to the governor for his action. The remaining few should follow soon. Bills related to taxes and transportation are two of the more notable finance packages to receive approval.
The tax bill is a top priority for the House, especially in light of the fact the state has a $1.65 billion surplus. The package we approved provides $1.15 billion in relief over the next two years, including a $218 million reduction on the state tax on Social Security income.
Highlights of the tax bill include:
- $218 million in relief for Minnesota’s senior citizens by increasing the income limit thresholds for the taxation of social security income.
- More than $70 million to address college affordability through a first-in-the-nation tax credit for student loan payments, along with subtractions and credits for families saving for college using 529 Savings Plans. 65,000 students will receive an average of a $414 reduction in their taxes through a tax credit for student loan payments.
- $35 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service.
- $36 million for families with young children by modifying the child and dependent care credit. A family of four making $50,000 a year will receive an additional $1,200 towards their child care expenses.
- $126 million in relief for hometown businesses by exempting the first $150,000 in property value from the extra tax on businesses and freezing its automatic inflator.
The transportation bill we passed would invest $5.5 billion over the next 10 years in the state’s transportation needs without raising taxes. The plan includes $2 billion for roads and bridges in the next two years. The proposal uses transportation-related state tax revenues to invest $372 million in new dollars for roads and bridges.
Additionally, the transportation proposal would fund:
- $20 million in FY18/19 for Small Cities Assistance Program for cities under 5,000
- $25 million to fund over 97 bridges on MNDOT's priority list
- Statewide investment in roads: $150m in trunk highway, $70m for counties, $22m for cities
It is good the governor has expressed openness to the approach we take with this bill and I look forward to his response.
I remain close to the budget process as a member of the Ways and Means Committee – the last stop for these finance bills. I addressed this subject in a column I have submitted to area papers and you can click here for the full text.
Until next time, have a good weekend.
Sincerely,
Bob