Friends,
Greetings from St. Paul where, the Legislature continues making progress on this session’s top issues. Here is a rundown of some with which I am most closely involved:
Officer Bill Mathews Highway 12 Memorial
A bill I authored to designate U.S. Highway 12 in Wayzata as “Officer Bill Mathews Memorial Highway” received approval from the House Ways and Means Committee on Monday and is now ready for a vote of the full body. H.F. 2739 has now been placed on the House’s general registry and we are awaiting its placement on the daily calendar to learn when it will be put to a vote. The bill allows for signage to be placed along Highway 12 memorializing Mathews for his public service in the wake of the tragic incident which claimed his life along what is recognized as one of the most dangerous stretches of highway in our state. The signage will be paid for by the Minnesota Fraternal Order of Police.
Federal tax conformity
As a member of the House Tax Committee, I have been working very closely with the process of bringing our state into conformity with vast changes the federal government enacted late last year. It all comes down to finding ways of preventing the state of Minnesota from gobbling up taxpayer savings passed along by the federal government.
That objective is easier stated than accomplished and the crux of the challenge is thus: Conformity with the federal tax changes in and by itself would translate to higher taxes at the state level for Minnesotans because the state income tax is applied to federal taxable income. So, if we take more money home in our checks at the federal level, then we would pay more in taxes at the state level barring legislative action.
One proposal would decouple state tax policies from those at the federal level, allowing state filers to itemize deductions. All options are on the table, again, in an effort to ensure federal tax relief reaches the very taxpayers it is intended to benefit instead of becoming a windfall of revenue to the state.
The House will unveil its tax conformity proposal in the coming weeks. Work on the plan continues, but it’s safe to say that rather than using tax conformity to raise taxes on Minnesotans, we will focus on holding Minnesotans harmless while reducing headaches for filers next year.
It should be noted that Gov. Mark Dayton line-item vetoed legislative funding last session, demanding a repeal of tax relief he had just signed into law. Now, in his proposed budget, he is holding federal tax conformity and reduced state taxes for individuals hostage to the same repeals – while also proposing raising fees on individuals. That’s a non-starter to me. He did say he will join most other states in using Federal Adjusted Gross Income, which could be a step in the right direction.
On the subject of state tax reforms, I have authored H.F. 3938 (estate tax conformity), H.F. 3811 (individual income tax rate reductions), H.F. 3937 (state general levy reform), H.F. 3892 (local government aid and fiscal disparity reform, and school safety initiatives).
Meanwhile, the governor’s supplemental budget proposal he recently issued features a $1.5 billion tax increase. This includes a $1 billion tax increase on Minnesotans’ doctors’ visits by continuing the provider tax resulting in higher health care costs, along with a $46.66 million fee increase on vehicle license/registration transactions.
Constitutional question
Another bill I have authored (H.F. 3915, amending allocation of motor vehicle sales tax revenue) would pose to Minnesotans a constitutional transportation question stating that no less than 70 percent of Minnesota motor vehicle taxes shall go toward roads and bridges and that no more than 30 percent of said tax revenue shall go toward transit. This question, if proposed, would remedy the defect in the previously passed constitutional amendment concerning allocation of MVST (motor vehicle sales tax) revenue.
The state Constitution currently lacks such language, meaning, theoretically, all 100 percent of the state’s claim to revenue generated by MVST dollars could be directed exclusively toward transit and nothing toward roads and bridges. Here is how the question would read and correct the current allocation of MVST dollars per the bill:
”Shall the Minnesota Constitution be amended to require that beginning January 1, 2020,
no less than 70 percent of the revenue from a tax imposed by the state on the sale of a new
or used motor vehicle be apportioned for highway purposes?”
I will pass along more on these and other issues soon. Until next time, I would like to send you wishes for a blessed Easter/Passover. May you enjoy extra time in the company of loved ones this season The Legislature will be taking a brief break in recognition of the holidays before returning for the final six full weeks of the 2018 session. As always, your input is welcome.
Regards,
Jerry