St. Paul, Minnesota — Today Minnesota Management and Budget announced that the budget forecast shows a projected budget surplus of $1.23 billion for fiscal years 2014-15, a $408 million improvement over the last forecast. The forecast shows a surplus of $2.59 billion in the FY 15-16 biennium.
“This is an example of what happens when you honestly balance a budget and invest in middle-class Minnesotans,” said state Representative Joe Radinovich (DFL – Crosby). “We know we have more work to do, but today’s forecast is good news for Minnesota and shows that we’re making progress.”
“Last year at this time we were facing a $627 million deficit and an $800 million IOU to schools,” said state Representative John Ward (DFL – Baxter). “In just one year, we’ve paid back our schools, gone from a deficit to a surplus, and have one of the fastest growing economies in the nation. We’re moving forward and there’s no reason to stop now.”
Yesterday, the House Tax Committee voted to move forward with legislation (HF 1777) to cut taxes for middle class families and to repeal business-to-business taxes. The $514 million tax cut bill would reduce taxes for hundreds of thousands of Minnesotans, largely by conforming to federal tax changes.
“With this surplus there is no reason to wait on this tax relief,” added Rep. Ward. “Nearly one million Minnesotans would receive a tax cut through this bill. With Minnesotans already filing their taxes, we should get this done quickly.”
Last session the House included federal tax conformity for tax year 2013 and beyond. However, this did not end up in the final budget signed into law. The legislation passed by the House Tax Committee would provide $200 million in middle class tax cuts through permanent federal tax conformity. Those tax cuts include:
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$111 million for middle income married families (conforms to federal tax code to eliminate ‘Marriage Penalty’ )
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650,000 families will see an average tax decrease of $120.
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$36 million for working families (Increase phase-out range for Working Family Credit to match Earned Income Tax Credit (EITC))
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More than 50,000 working families will see an average decrease of $300.
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$26.4 million for students, parents paying for college and students paying off loans (Education-related provisions including qualified tuition and related expenses)
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$3.9 million for new homeowners (mortgage insurance premiums deduction)
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80,000 new homeowners will see an average tax cut of $60.
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$7.2 million for homeowners that refinanced or had a short sale
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$1.8 million for Minnesota families with dependents
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25,000 families with household incomes below $38,570 will see a $65 tax decrease.
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$400,000 for adopting families (employer- provided adoption assistance exclusion)
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$1.1 million for 60,0000 teachers (Classroom expense deduction for educators)
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(Source: Non-partisan House Research)
“We know that our economy grows best when it grows from the middle out and when middle-class families are doing well,” said Rep. Radinovich. “We need to continue work to strengthen the middle class and provide greater opportunity. This would be another step in that direction.”
The House Tax bill also would repeal three business-to-business taxes (warehousing and storage services, commercial equipment repair (including farm machinery) and telecommunications equipment) that were passed as part of a Senate package in the 2013 budget.
The full House will likely vote on the tax relief bill next week.
Reps. Ward and Radinovich are also focused on job creation measures, and increasing funding for our home and community-based long-term care workers.
“Businesses continue to have trouble finding skilled workers,” said Rep. Ward. “While our economy has continued to improve, there are those who haven’t felt a recovery. We need to continue to do more to boost our economy in Greater Minnesota and I look forward to working on legislation to do just that.”
“Our home and community-based long-term care workers deliver excellent care to our loved ones and save the state money,” added Rep. Radinovich. “Our providers and workers are long overdue for an increase and with this surplus, we can work together to get that done.”
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.