ST. PAUL, MN – The Minnesota House of Representatives passed comprehensive tax and higher education bills this week by votes of 69-64 and 86-44, respectively.
The votes cap an intense week at the capitol where House lawmakers approved a series of omnibus bills, marking significant progress towards finalizing a budget before the Legislature adjourns in late May.
The omnibus tax bill passed by the House ends the cycle of deficits, shifts, and gimmicks seen over the past decade and provides for a structurally balanced budget into the future. It covers the cost of new middle class property tax cuts, historic investments in education at every level, and pays back the remaining $854 million school shift balance caused by a Republican-controlled Legislature’s decision to enact record borrowing from schools in 2011.
“This was a great week for northern Minnesota,” said Rep. Tom Anzelc (DFL—Balsam Township). “We passed a responsible, gimmick-free tax bill that raises adequate revenue to provide for our state’s needs in areas like education, transportation, and health care. I’m pleased we’re moving past the era of cuts and shifts that hurt our economy for far too long.”
The omnibus tax bill provides $270 million in direct middle class property tax relief to nearly one million Minnesotans through the Homestead Credit Refund, a retooled renter’s credit and increased funds to cities and counties. Under the new Homestead Credit Refund, homeowners in Itasca County will receive an average increase of $166 and those in Cass County will receive an average increase of $163. The new proposal also enhances the renter’s credit by increasing the maximum refund allowed for renters.
Cities and counties will see a significant increase in local government and county program aid (CPA) under this bill, which includes the largest LGA reform in a decade. The new LGA formula provides $110 million in need-based aid to cities and counties after years of cuts to vital services like police officers and firefighters. Itasca County will receive $260,563 more in CPA in 2014 and Cass County will receive $117,624 more. The city of Grand Rapids will receive $365,565 more in LGA in 2014.
“The LGA increases in this bill will make sure our cities and towns can continue providing good services, sturdy roads, and the high quality of life Minnesotans deserve,” said Rep. Anzelc. “By providing property tax relief to middle class families, they’ll have more money in their pockets to save for retirement, send their kids to college, or buy the goods they need on a daily basis like gas and groceries. This bill is going to lead to greater economic security for the people of northern Minnesota.”
In addition to LGA reform and middle class property tax relief, the omnibus tax bill pays back the remaining $854 million school shift in full, which was a major plank in the platform DFLers campaigned on in 2012. The bill pays back Minnesota schools by establishing a temporary income tax surcharge on the wealthiest 0.5% of Minnesotans, or those with taxable income greater than $500,000 per joint filers. The surcharge expires after the shift is paid back in full, which would happen in two years or sooner.
“Borrowing record amounts of money from our students was irresponsible and just plain wrong,” said Rep. Anzelc. “This bill keeps our promise to Minnesotans to pay back the shift in full. I’m pleased we’re returning Minnesota to a mindset where our youngsters come first. Rudy Perpich would be proud.”
The House also passed a higher education bill this week that freezes tuition at Minnesota’s public colleges and universities. It passed by a vote of 86-44 and comes as welcome news to students who have seen tuition more than double since 2000.
“As a proud graduate of Hibbing Community College, I know how big of a difference community colleges in our region make for our young people,” said Rep. Anzelc. “I was a good student, but came from a poor family. Community college gave me a ladder up. It breaks my heart to see so many students graduating with record amounts of debt. It’s just plain wrong. This bill takes serious steps to get tuition under control. It’s a step in the right direction and I know we’ll continue to make this issue a top priority.”
Rep. Anzelc encourages his constituents to contact him with any questions or comments about the omnibus tax and higher education bills passed by the House this week. He can be reached by phone at (651) 296-4936, by email at rep.tom.anzelc@house.mn, or by postal mail at 517 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.