Saint Paul, Minn. – Today, the House wrapped up the 2013-2014 Legislative Session early for the first time in over a decade after passing their supplemental budget and their second tax bill off the House floor. A package of Capital Investment projects was also passed early this morning.
The passing of these key bills mark the end of a very productive biennium for the Legislature. When lawmakers came to the Capitol in January of 2013, Minnesota was faced with a $600 million budget deficit and still owed schools over $800 million. After passing a balanced budget in 2013, lawmakers returned to the Capitol in 2014 with a $1.2 billion budget surplus and an agenda focused on cutting taxing and growing local economies in Greater Minnesota.
Tax Bill 2
“Tax Bill 2,” provides $103 million in additional tax cuts to Minnesota homeowners, renters, farmers and businesses. Once this 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. About 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.
“This bill continues the work we’ve done this session to lower taxes for working families across Minnesota,” said Rep. John Persell (DFL – Bemidji). “Minnesota’s economy is making some improvements, and these investments will help to ensure that people in all areas of the state have the chance to improve their financial situation as well.”
The bill also includes significant investments in Aquatic Invasive Species (AIS) programs at the local level.
“The funding for AIS is critical for our area,” said Rep. Roger Erickson (DFL – Baudette). “So many communities up north and around the state depend heavily on the economic activity that tourism creates, and lakes are a huge part of that. This funding will help protect those local economies by allocating money at the county level. This will allow local officials to tailor the programs to the specific needs of the area.”
The first tax bill signed into law this session by Governor Dayton made reduction 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.
· Farmers: $17 million in property tax relief to more than 90,000 homesteaded farms in 2014. An average family farmer in Minnesota will see $410 in property tax relief – an increase of about $200.
· Homeowners: Each and every homeowner receiving a refund will see a 3% increase in 2014. The average homeowner will see a refund of $837 for 2014. This comes on top of the $133 million in direct property tax relief passed in 2013 for homeowners and renters.
· Renters: Each and every renter receiving a refund will see a 6% increase in 2014. The average renter will see a refund of $643.This comes on top of the $133 million in direct property tax relief passed in 2013 for homeowners and renters.
Source: Non-partisan House Research
In addition to property tax relief, the tax bill includes targeted income and sales tax relief:
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Aquatic Invasive Species Prevention Aid: $4.5 million this year and $10 million a year thereafter will be distributed to 83 of Minnesota's 87 counties with public-access boat landings, to help manage county-based AIS-control efforts.
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Volunteer first-responders: Fourteen counties will participate in a pilot project aimed at improving retention and recruitment of these crucial positions. The pilot includes a $500 stipend to be paid to each eligible first-responder in participating counties, including Beltrami and Clearwater.
Supplemental Budget
The Supplemental Budget bill makes critical investments in education, long term care givers, expanded broadband internet access, and Greater Minnesota workforce development.
Along with investments in last year’s budget, money in this year’s supplemental budget will help provide schools statewide with a total increase of $300 per pupil K-12 for 2014-2015.
Last year, the Legislature provided a rate increase for nursing home workers for the first time in years. The Supplemental Budget will provide a similar 5 percent increase for home and community based long term care workers this year.
“These workers take care of our friends and family,” said Rep. Persell. “For the work they do, they probably deserve an even bigger raise, but this is a good first step.”
The bill also invests heavily in job creation across Greater Minnesota. As the economy continues to improve, some rural areas are being left behind due to lack of high speed internet access needed for new businesses to succeed. The $20 million in broadband grants will be leveraged against local matching dollars to create an even greater impact on rural communities across Minnesota.
“Even a small business needs access to basic resources to be successful,” said Rep. Erickson. “Expanding our high speed internet access will ensure our rural communities are on a more level playing field when businesses are looking to set up shop and create jobs.”
Another significant challenge businesses face is finding workers who have the right qualifications for the position their looking to fill. This skills gap also leaves workers with fewer options for jobs in their area. The Supplement Budget invests in regional initiative foundations, business development organizations, and job training centers that can help match up prospective employees with businesses looking to hire workers in their area.
These key bills cap a session of progress that also included provided emergency heating assistance, boosting funding for K-12 schools by another $25 per student, and addressing the pay gap for female workers by updated outdated workplace policies in state statute.