Friends,
On Thursday, the House passed a bill that cuts taxes for middle-class Minnesotans and repeals three businesses-to-business taxes.
We were committed to getting some tax relief to middle class Minnesotans and small businesses as soon as possible. I’ve never seen the House act this quickly.
The House tax bill cuts taxes by $200 million for married Minnesotans, families, students, homeowners, and businesses by simplifying Minnesota’s income tax code. By conforming to the federal tax code, many retroactive provisions will benefit Minnesotans who are paying their taxes now. 70 percent of Minnesotans have yet to file their 2014 taxes, so there is urgency to get these tax cuts signed into law.
Governor Dayton has signaled his support to move quickly to pass these tax cuts.
According to nonpartisan House Research, the bill includes:
· $111 million for middle-income, married families by conforming to federal tax code to eliminate “Marriage Penalty”). More than 650,000 families will see an average tax decrease of $120.
· $36 million for working families by increasing the phase-out range for Working Family Credit to match Earned Income Tax Credit (EITC). More than 50,000 working families will see an average decrease of $300.
· $26.4 million for students and parents who paying for college and students paying off loans through education-related provisions, including qualified tuition and related expenses.
· $3.9 million for new homeowners through a deduction for mortgage insurance premiums. More than 80,000 new homeowners will see an average tax cut of $60.
· $7.2 million for homeowners that refinanced or had a short sale.
· $1.8 million for Minnesota families with dependents. More than 25,000 families with household incomes below $38,570 will see a $65 tax decrease.
· $400,000 for families adopting children. Employer-provided adoption assistance is excluded.
· $1.1 million for 60,000 teachers through classroom expense deduction for educators.
We also took action on three of the business-to-business taxes. They were part of a 2013 Senate package that paid for an upfront capital sales exemption for businesses and provided property tax relief by eliminating sales taxes for cities and counties. The taxes we repealed were on warehousing and storage services, commercial equipment repair (including farm machinery) and telecommunications equipment.
We’re already talking about more tax relief later this session.
Good news on property taxes too
Two recent reports show that overall property taxes around the state will go down this year for the first time in more than a decade. This is after the legislative in 2013 made property tax relief a cornerstone of its agenda.
One study conducted by non-partisan House Research found that homeowners will see a $161 million property tax cut in 2014 – a whopping 4.9 percent decrease over 2013. Small businesses will also see a net property tax decrease of 2.1 percent and renters of 0.1 percent.
Property taxes are going down despite a significant number of voter-approved education levies. Eighty-six percent of the operating school levy referenda passed in 2013 – or 51 of 59 school districts. That is the highest approval rate recorded by the Minnesota School Board Association. The total increase in school levies for 2014 was $119 million.
Direct property tax refunds are expected to increase by $133 million in 2014. This direct property tax relief passed by the legislature in 2013 will increase refunds to nearly 500,000 homeowners and renters.
Expanding Broadband access across the state
Many of us take good access to the Internet for granted. But in reality, far too many Minnesotans don’t have reliable broadband access to the Internet. One study showed that, while 93 percent of Metro-area residents have access to broadband coverage, only 46 percent of households in Greater Minnesota do.
That’s why I’m working with legislators on a bill that would improve the state’s broadband infrastructure. The bill, the Border-to-Border Broadband Infrastructure Fund, would invest $100 million to improve the state’s broadband infrastructure.
Many of us just use the Internet for surfing and steaming. To others, it is a way of life:
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Business: Business is increasingly done online, and the ability to sell to consumers worldwide requires reliable, world-class connections.
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Farming: As farming becomes even more globally competitive, our communities need to be connected for up-to-the-minute updates on weather, disease identification, and commodity prices, alongside GPS navigation.
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Health care: Greater Minnesota’s long distances require health care provided over broadband, which is already practiced elsewhere.
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Education: Currently, many Greater Minnesota parents bring their children to connected areas miles away from their homes. This is not viable to attract new residents and keep our current ones.
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Independent Living: As the baby-boomers age, the ability to live in remote areas is made easier through the connections broadband provides.
If we were able to give all Minnesotans the same access to broadband that metro residents enjoy, it would pay huge dividends. Household incomes would increase by $440 million, more than 15,000 jobs would be created, and more than $1 billion would be added to the state’s GDP. It would be a game-changer in the lives of thousands of our neighbors.
Sincerely,
Sheldon