Friends,
Minnesota has undergone a remarkable metamorphosis in the last 15 months.
In the last year, more than 46,000 Minnesotans have found work. We learned last month that we have a $1.2 billion budget surplus, and, for the first time in more than a decade, property taxes in the state went down.
While the economic picture in many areas of Minnesota is improving, all areas need to be part of this recovery. That’s why House DFL lawmakers introduced legislation that will greatly expand current economic opportunities in Greater Minnesota. Our legislation means that it won’t matter where you live – Minneapolis, St. Paul or in Greater Minnesota – we’ll all share in this incredible recovery.
The lawmakers outlined new initiatives to expand economic opportunity in Greater Minnesota for individuals, families, farmers and businesses:
RURAL PROPERTY TAX RELIEF
This package of property tax proposals builds on last year’s efforts through an additional $40 million in targeted property tax relief to Minnesota homeowners, renters and family farmers:
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Family Farmers: Although property taxes are expected to decrease for homeowners this year, farmers will see property tax increases, driven by a 24 percent increase in market value. This bill provides $15 million in immediate property tax relief to more than 75,000 family farms. An average family farmer in Minnesota will see a total of $490 in property tax relief.
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Homeowners: This bill provides a one-time increase to further boost Homestead Credit Refunds in 2014. Each and every homeowner receiving a refund will see an additional 3 percent increase, providing $12.1 million in property tax relief to 500,000 Minnesota homeowners.
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Renters: This bill provides a one-time increase for all Renters’ Credit Refunds paid in 2014. Each and every renter receiving a refund will see a 6 percent increase, providing an additional $12.5 million in property tax relief to 350,000 Minnesota renters.
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Counties: Last session the Legislature boosted state aid to counties by $40 million a year so counties could invest in infrastructure and services while relieving property tax pressure. Due to changes in population and land values, some counties did not fare well. This initiative would provide one-time aid to those 11 counties.
BROADBAND EXPANSION
House DFLers are calling for a significant investment in broadband as part of the House Jobs and Economic Development budget bill.
Legislation would expand fiber-optic broadband infrastructure in under-served regions of the state and help continue mapping deployment of broadband to measure Minnesota’s progress towards meeting broadband goals and where further investments are needed.
GREATER MINNESOTA JOBS AND ECONOMIC DEVELOPMENT
After passing a robust jobs and economic development bill last year that is helping to spur private investment and job growth throughout Minnesota, lawmakers are authoring several bills that will target about $10 million in economic development resources to support rural job growth and the business sectors critical to rural economies. The legislation would:
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Grow greater Minnesota businesses by expanding an existing small business revolving loan fund that offer loans and gap financing for small businesses in need of capital.
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Support small and mid-sized manufacturers with an innovation voucher pilot program to allow small and midsized companies to purchase expertise and services from universities, research institutions, and consulting firms like Enterprise Minnesota.
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Assist businesses in developing high skilled workers through increased funding for the Jobs Skills Partnership, small business grants and increased funding for Small Business Development Centers.
SUPPORT FOR FARMERS AND FAMILIES
Modeled after a successful pilot project, this bill will appropriate $1.5 million to distribute “surplus” agriculture crops to food shelves across the state. Producers and growers will donate surplus crops to Second Harvest to distribute to food shelves and then be reimbursed for the cost of harvesting and packaging.
MNsure deadline looms
The deadline for signing up for health insurance through MNsure, Minnesota’s health insurance exchange, is right around the corner. Failing to do so puts you at risk of a fine.
More than 125,000 Minnesotans have already signed up for high quality, low cost health insurance through MNsure. All plans cover preventive care, doctors’ visits, hospitalizations, prescriptions, ER services, maternity care and more. Minnesotans with pre-existing conditions cannot be denied, and there are no lifetime limits on coverage. Financial assistance is available to help pay monthly insurance premiums. A single individual earning up to $45,960 a year or a family of four earning up to $94,200 a year could qualify.
MNsure got off to a rough start, thanks to problems with the website. But most of the issues have been addressed. The average phone hold time is less than 60 seconds, down from an hour in December. There are nearly 170 agents taking calls. That’s up from 67 in December. There are 50 staff members whose job it is to help residents manually enroll in if there is an IT problem. The success rate for online eligibility determinations is 98 percent.
Our rates are the lowest in the country. MNsure bronze, silver and gold plans cost less than the average bronze plan in other states. Residents of Wisconsin and other states that chose to use the federal exchange are experiencing higher costs. Late in October, a report found that insurance premiums in the Wisconsin insurance marketplace averaged up to 99 percent higher than premiums in Minnesota. That’s a difference of $1,800 a year!
Don’t wait until the last minute. Sign up at www.mnsure.org.
Tax bill signed, sealed and delivered
Last Friday, the Legislature passed and sent to the governor a bill providing $508 million in middle-class tax cuts for more than one million Minnesotans. The governor signed the bill Friday night.
Last session the House included federal tax conformity for tax year 2013 and beyond, but it did not end up in the final budget signed into law. More than one million middle-class Minnesotans will see $225 million in tax cuts due to federal conformity and boosting the state’s Working Family Credit. The tax cuts through federal conformity include:
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$111 million for middle income married families by eliminating the “marriage penalty”
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650,000 families will see an average tax decrease of $115
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The vast majority of families claiming the standard deduction make less than $75,000
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$36 million for low income working families by matching the state’s Working Family Credit with the federal Earned Income Tax Credit (EITC)
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54,000 working families will see an average tax decrease of $300
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$7.2 million for homeowners that refinanced or had a short sale
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$3.9 million for new homeowners through deduction of mortgage insurance premiums
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80,000 new homeowners will see an average tax cut of $60
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$26.4 million for students and parents paying for college and students paying off loans
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$1.9 million for Minnesota families with dependents
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26,000 families with household incomes below $38,570 will see a $80 tax decrease
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$400,000 for adopting parents who receive adoption assistance from employers
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$1.1 million for 60,0000 teachers with the classroom expense deduction for educators
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$4 million for charitable contributions
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$6.7 million for businesses - to make tax filing simpler for businesses
(Source: Non-partisan House Research)
The bill increases the Working Family Credit above and beyond federal conformity, providing a total of $66.2 million in tax cuts to 331,000 claimants earning less than $49,103. The average family will see a $146 tax cut through this expansion of the Working Family Credit.
The final bill also repeals three business-to-business taxes on warehousing and storage services, commercial equipment repair (including farm machinery) and telecommunications equipment.
Federal and state income tax returns must be filed by April 15, 2014, unless an extension is filed with the IRS. You may want to wait to file until April 3, when the Revenue Department issues updated forms, instructions and more detailed guidelines.
I’ve included a useful attachment in this newsletter I think you will find helpful.
Tax tips
When you do finally do file, the Minnesota Department of Revenue wants you to remember these important tips when filling out your forms:
· Enter your name and any dependents names as they appear on Social Security cards. Incorrect names or Social Security numbers can result in refund delays.
· Double-check bank routing and account numbers used on tax forms. Incorrect account numbers can delay your refund.
· Complete each form and carry totals to the correct lines. If you electronically file, the calculations are done for you.
· If you move after filing, contact the Department of Revenue right away. That way anything sent to you will reach you, such as refund checks or requests for more information. You should do this even when requesting direct deposit.
· You should file the return by the April 15, 2014, due date, even if you owe more than you can pay. You can use our new online system to set up multiple payments with different due dates. Pay as much as you can by the due date, and continue to make payments until you receive a bill from us. When you receive the bill, contact us and we can help you set up a payment plan for the remaining balance.
· Do you qualify for free electronic filing? To see if you qualify to electronically file your income tax return for free, click here. Be sure to access the software products from our website to file for free.
The department encourages taxpayers to choose Direct Deposit, allowing for a safer and faster refund.
All my best,
Mike