St. Paul, Minnesota — Today the Minnesota House of Representatives ended the 2014 Legislative Session early after passing “Tax Bill 2” and the supplemental budget. “Tax Bill 2” provides $103 million in additional tax cuts to Minnesota homeowners, renters, farmers and businesses. Once the bill is signed into law, the Minnesota Legislature will have provided $550 million in tax cuts this session – providing tax cuts for nearly 2 million Minnesotans. More than one million Minnesotans received tax cuts in the first tax bill passed this session. 940,000 Minnesotans will see property tax relief in Tax Bill 2, including 500,000 homeowners, 350,000 renters, and 90,000 farmers.
“We came into this session looking to build on the progress made last year and we accomplished that,” said state Representative John Ward (DFL – Baxter). “Over the last two years, we’ve closed the deficit, fairly and progressively balanced our state budget, paid back our schools, and invested in jobs, tax relief, all levels of education, and our future. Minnesota is moving forward again.”
“After a decade of disinvestment in our future and our communities, Minnesotans said loud and clear that they wanted to go in a different direction,” said state Representative Joe Radinovich (DFL – Crosby). “And we delivered, investing in education for learners of all ages across the state, ended a decade of skyrocketing property tax increases through increased direct relief to homeowners and renters, and made job creation a priority once again. We’re making progress and it’s progress we can all share in.”
The tax bill signed into law this session by Governor Dayton made reductions to middle-class income taxes, largely through federal tax conformity. This second tax bill will cut taxes largely through further property tax relief. Tax Bill 2 includes $45 million in targeted property tax relief to Minnesota homeowners, renters, and farmers.
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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 $17 million in property tax relief to more than 90,000 homesteaded farms. An average family farmer in Minnesota will see $410 in property tax relief – an increase of about $200.
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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% increase, providing an additional $12.1 million in property tax relief to 500,000 Minnesota homeowners. The average homeowner will see a refund of $837 for 2014.
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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% increase, providing an additional $12.5 million in property tax relief to 350,000 Minnesota renters. The average renter will see a refund of $643.
Source: Non-partisan House Research
In addition to property tax relief, the tax bill includes some additional measures. The Brainerd Lakes Regional Airport water/sewer line extension is included in the second tax bill, along with the Brainerd-Baxter local optional sales tax which would fund the extension. A tax increment financing bill for Baxter will also be in the tax bill. Rep. John Ward was the chief author of these provisions. Rep. Radinovich co-authored the airport and local sales tax extension provisions. The tax bill also contains $180,000 for local Cuyuna infrastructure.
Today, the House also passed its supplemental budget, which included critical investments in Greater Minnesota job creation, caregivers, and education. The budget includes $30 million in job creation measures, mostly aimed at Greater Minnesota.
Rep. Radinovich chief authored a provision that would provide innovation vouchers to help small and mid-sized manufacturers grow. This pilot program would allow small and midsized companies to purchase expertise and services from universities, research institutions, and consulting firms like Enterprise Minnesota that can help them improve their products, implement new technologies, and achieve growth.
In addition to these provisions, the budget increases funding for home and community-based long-term care providers by 5 percent and appropriates $20 million for a border-to-border grant fund to promote the development of broadband. Areas of the state with low broadband connectivity will receive priority.
The budget also provides a formula funding increase for K-12 schools — increase of $25 per pupil — to further improve education outcomes. The budget also increases funding for early childhood scholarships and lifts the cap on scholarship funding per child. After a decade where the funding equity gap between metro and rural schools doubled, Rep. Radinovich chief authored legislation to close the cap by a third in just two years.
The legislature also sent Governor Dayton a chief authored by state Representative John Ward (DFL – Baxter) that deals with a snowplowing issue involving undeveloped land and the city of Jenkins. The League of Minnesota Cities supported the bill on behalf of the city of Jenkins and the issue affects cities across the state.
The bill would eliminate a previously enacted sunset clause, on local road authorities’ power to pass annual resolutions stating their intent to remove snow from such subdivisions.
In addition to the final bonding, budget, and tax cut bills, the Legislature worked at a fast-pace to build on the state’s economic momentum and expand economic opportunity to more Minnesotans:
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Propane Assistance: In the first week of session, we increased assistance to Minnesotans struggling to pay their heating costs during our terribly-cold winter. This bill was chief –authored by Rep. Radinovich.
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Raise the minimum wage: Raised Minnesota’s minimum wage in stages to $9.50 for large business and $7.75 small businesses by August 2016. More than 350,000 Minnesotans will get a raise.
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Women’s Economic Security Act: Passed the Women’s Economic Security Act (WESA). WESA aims to close the gender pay gap, strengthen workplace protections and flexibility for pregnant mothers, and expand employment opportunities for women in high-wage, high-demand professions.
Reps. Ward and Radinovich encourage constituents to contact them with any questions, comments, concerns, or ideas on any legislative topic. Rep. Ward can be reached by phone at 651-296-4333 or by email at rep.john.ward@house.mn. Rep. Radinovich can be reach by phone at 651-296-2365 or email at rep.joe.radinovich@house.mn.