ST. PAUL, MN —The Minnesota House of Representatives passed a comprehensive tax omnibus bill tonight by a vote of 69-64.
The bill pays for a structurally sound budget that funds investments in education at every level, provides middle class property tax relief, and increases local government and county program aid. It also pays back the remaining $854 million school shift balance through a temporary income tax surcharge on the wealthiest 0.5% of Minnesotans, or those with taxable income greater than $500,000 per joint filers.
“For the first time in a decade, lawmakers are putting Minnesota’s fiscal house on sound footing,” said Rep. Jeanne Poppe (DFL—Austin). “Our region will benefit from the increase in local government and county program aid in this bill. The investments in areas like education funding help us create prosperity over the long haul.”
The bill provides $270 million in direct middle class property tax relief to nearly one million Minnesotans through the Homestead Credit Refund, retooled renters’ credit and increased funds to cities and counties. Under the new Homestead Credit Refund, the average homeowner will see an increase of $219. Residents of Mower County will receive an additional $130,000 in property tax relief. The new proposal also enhances the renter’s credit by increasing the maximum refund allowed for renters.
Cities and counties will see a significant increase in local government and county program aid under this bill, which includes the largest LGA reform in a decade. The new LGA formula provides $110 million in need-based aid to cities and counties after years of cuts to vital services like police officers and firefighters. The city of Austin will receive an increase of over $1 million in LGA funding in 2014.
“Minnesotans will remember this legislative session as the moment when we stopped hiding the connection between what our needs are and what we will pay to fund those needs,” added Rep. Poppe. “In order to address our needs, we need to generate resources. As we all know, nothing comes free. By investing in the solutions to solve the problems facing our state today, we’ll all see long-term benefits.”
There are three main revenue components to the House Omnibus Tax bill used to balance the budget and fund state priorities. These components increase tax fairness by asking the wealthiest 1.1% of Minnesotans to pay their fair share, close corporate loopholes and recover state costs from tobacco and alcohol consumption.
Differences between the House and Senate tax bills will be ironed out in a conference committee before each chamber holds a final vote.