Saint Paul, Minnesota – The Minnesota House of Representatives passed the conference committee report on the Omnibus Tax Bill. The bill balances the budget honestly, provides property tax relief and funds strategic investments in education and job creation. State Representative Mary Sawatzky (DFL – Willmar) voted in support of the bill.
“We made a commitment to balance our budget honestly and we’re accomplishing that today,” said Rep. Sawatzky. “Minnesota has been on a decade-long roller coaster of deficits brought on by shifts, gimmicks and irresponsible budgeting. We have an obligation to balance our budget responsibly and honestly.”
The bill provides $400 million in middle-class property tax relief for Minnesotans through the Homestead Credit Refund, retooled renters’ credit and increased aid to cities and counties.
The Homestead Credit Refund provides universal, targeted property tax relief to middle-class homeowners. Under this program, more than 300,000 homeowners (75% of filers) will see a refund increase. More than 100,000 additional homeowners will be eligible for a refund. Homeowners will be notified if they are eligible for a refund over $1,000 and the average homeowner will see their refund increase by $212.
The previous Legislature raised property taxes on renters who earn less than $55,000 a year by cutting the Renter’s Credit. This provision enhances the Renters’ Credit, providing property tax relief to Minnesota renters (including elderly and disabled renters), so that the neediest renters see the greatest benefit. Under the improved Renter’s Credit, 66,000 filers will see a bigger refund, 10,000 additional renters will qualify, and the average renter will see their refund increase by $179.
The bill also increases Local Government Aid by $80 million and Country Program Aid by $40 million. The budget includes a sales tax exemption for most purchases by cities and counties.
“Property taxes have nearly doubled in the last decade and are a tremendous concern for our families, seniors, farmers, and small businesses,” said Rep. Sawatzky. “This bill provides direct property tax relief and puts money back in the pockets of hard-working, middle-class Minnesotans, who are the economic engine of this state.”
The budget replaces the existing capital equipment sales tax refund with an exemption at the time of purchase. The exemption applies to businesses when they purchase equipment used for manufacturing, fabrication, mining or refining.
“The upfront capital equipment exemption is a great piece of common-sense reform that has received bipartisan support in the past,” said Rep. Sawatzky. “Moving this exemption to the time of purchase will simplify taxes for our great small businesses and free up capital for them to invest more in their business.”
The bill asks the wealthiest 2 percent of Minnesotans to pay their fair share by raising the income tax rate to 9.85 percent for individuals with a taxable income greater than $150,000 or $250,000 for joint filers. This group currently pays a smaller percentage in income taxes than low-and middle-income earners.
The proposal increases the user-based fees on cigarettes to $2.83 per pack and catches Minnesota up with Iowa, South Dakota and Wisconsin who all have a higher cigarette tax. The bill also closes corporate tax loopholes and subsidies that are outdated, ineffective, or that we can no longer afford.
“This is an honestly balanced budget that funds our priorities of investing in education, providing middle-class property tax relief, and spurring job creation,” concluded Rep. Sawatzky. “We’re investing in priorities Minnesotans broadly share aimed at a stronger middle class and a stronger Minnesota.”
Rep. Sawatzky encourages constituents to contact her with any questions, comments, concerns, or ideas on any legislative topic. Rep. Sawatzky can be reached by phone at 651-296-6206 or by email at rep.mary.sawatzky@house.mn. Constituents can also visit Rep. Sawatzky’s AreaVoices blog, legislative page and sign up for email updates.