ST. PAUL – A day after passing a $332 million supplemental budget that continues to make vital investments in education, health and human services, transportation and economic development, the Minnesota House of Representatives approved its second tax cut bill of the 2014 session – a $103 million tax cut aimed at Minnesota’s homeowners, renters and farmers.
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Homeowners: A one-time increase for all Homestead Credit Refunds paid in 2014. Each and every homeowner receiving a refund will see a 3 percent increase, providing an additional $12.1 million in property tax relief to 500,000 Minnesota homeowners. This comes on top of the $133 million in direct property tax relief passed in 2013 for homeowners and renters.
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Renters: 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. This comes on top of the $133 million in direct property tax relief passed in 2013 for homeowners and renters.
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Farmers: This provision builds off the effort to restore the Homestead Credit by enhancing the market value credit for homesteaded farms. The result is an immediate $18 million in property tax relief to more than 90,000 homesteaded farms. An average family farmer in Minnesota will see $460 in property tax relief.
In addition to property tax relief, the House tax bill includes tax relief for Minnesota small businesses. The bill provides a property tax cut for small businesses with property value less than $1.1 million by excluding all commercial and industrial property value less than $150,000 from the statewide general property tax. The bill also includes sales tax reforms that provide additional sales tax relief to small businesses.
The bill also provides tax relief to our active military members. The bill extends our active military income tax subtraction to National Guard service members in the Active Guard Reserve.
“We need to make sure that our economy keeps up its hot streak,” said Rep. Dan Schoen (DFL-St. Paul Park). “The best way to do that is to strengthen Minnesota’s middle class. This tax cut, combined with the first tax cut we passed just a few weeks ago, will do just that.”
The $443 tax cut bill that was signed by Gov. Dayton last month provides $225 million in relief for working families through federal tax conformity, as well as $167 million in relief for businesses and farmers through the repeal of businesses to businesses taxes.
Late Thursday night, the House passed the Supplemental Budget Bill, which continued the investments made by DFL lawmakers last year in education, public safety, health care and job creation. It includes:
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Education investments that build on the 2013 “education session.”
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Funding for home- and community-based health care workers who provide care for the elderly and disabled.
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Critical transportation funding to repair potholes and make investments in highways, roads and bridges.
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Statewide investments to strengthen Greater Minnesota through broadband investments and economic development resources.
The DFL supplemental budget included $170 million for economic development programs – much of it aimed at rural Minnesota – and some urgent infrastructure projects. The Greater Minnesota Initiative also invests $10 million in economic development resources to support rural job growth and the business sectors critical to rural economies.
Home- and community-based health care workers who provide care for the elderly and disabled will get a long overdue 5 percent increase for their work.
The bill also increases funding for rural nursing homes and provides additional investments in senior nutrition.
An additional $92 million will go to education – providing a funding increase for K-12 schools, allowing more Minnesota children to have access to affordable, high-quality early learning opportunities, fully funding reduced price for school lunches to ensure no Minnesota child is denied a lunch be his or her family is financially unable to pay.