There hasn’t been a comprehensive omnibus tax bill since 2013 when Gov. Mark Dayton instituted a new fourth-tier income tax to deal with a daunting $6 billion budget deficit. During the ensuing years of budget surpluses, Republicans put forward comprehensive bills to provide tax relief; however, these were met with the governor’s veto stamp.
Rep. Greg Davids (R-Preston), chair of the House Taxes Committee, is hoping for a different outcome this year.
He sat at the table with his counterpart Sen. Roger Chamberlain (R-Lino Lakes) Wednesday during the first meeting of the conference committee that is charged with finding common ground between the House biennial proposal of $1.31 billion in tax relief and the Senate’s $902.9 million. The governor’s presence will be felt as revenue and budget agency heads make the case for Dayton’s broader budget that hinges on passage of a much smaller tax relief bill — $191.7 million — over the 2018-19 biennium.
“I hope we can come together. I have but one goal and that is to get a good strong tax bill signed by our governor. How do we get through a 450-page tax bill? We do it one page at a time,” Davids said at the meeting’s start.
This year, there are a few glaring differences between the House and Senate proposals.
The House would like to designate $450 million of various vehicle-related fees and taxes to road and bridge projects, rather than have the money go into the state’s General Fund. This provision is not included in the Senate tax bill; however, while favored by the Senate as part of the omnibus transportation bill, this should be on a watch list as the future of road and bridge funding hinges on its inclusion, something the governor has opposed.
Additionally, the Senate appears to have little interest in many of the House property tax provisions with the exception of changes to the state general levy that is paid over and above local property taxes by the commercial and industrial tax base and seasonal recreational property owners.
While the House is mute on the Senate’s provision to increase the Working Family Credit, which is supported by the governor, on the flip side, the House supports modifications to the Child and Dependent Care Credit (another Dayton must-have) and the Senate does not.
The bill has a long way to go before it would meet with the governor’s approval. Sure to cause angst for Dayton is the absence of increases to the renter’s credit, homeowner property tax credit, local government aid and county program aid.
In a March 13 letter to House and Senate leadership, Dayton laid out his objections. “I strongly disagree with providing tax breaks for our state's wealthiest and corporations at the expense of working Minnesotans and families most in need. While businesses continue to see record profits, many families are just beginning to feel the effects of our state's improving economy. Their economic futures remain uncertain, so tax relief should prioritize stabilizing family budgets through the Working Family Credit or Child and Dependent Care.”
With no agreement on spending targets, there was little the group could do Wednesday except the overview. With Chamberlain now holding the gavel, he said there are no plans for the committee to meet Thursday.
The state’s latest economic forecast projects a budget deficit of $188 million for the current two-year biennium, and a $586 million deficit for the 2020-21 biennium
The Minnesota Supreme Court on Thursday upheld Gov. Mark Dayton’s line-item veto of the Legislature’s 2018-19 operating budget.
The budget process explained — and why it matters