Pre-tax learning accounts

Many employees in Minnesota take advantage of pre-tax accounts to help pay for medical and dental expenses; they might be able to use them for education as well.

HF72, sponsored by Rep. Kim Norton (DFL-Rochester), would allow for the creation of lifelong learning accounts through the Department of Employment and Economic Development. Employers and employees who make contributions would be eligible for tax credits.

The House Higher Education and Workforce Development Finance and Policy Division approved the bill March 10 and referred it to the House Finance Committee.

The credit for employees would equal 50 percent of contributions up to $1,000, while the employer credit would be equal to the employer’s account contribution up to $500. The accounts would be “portable,” meaning they would stay with the employee and not the company.

Norton said the bill would help ensure that the state’s workforce has the tools to deal with rapidly changing economic times and an aging population of workers who will likely need to be retrained.

“We often see it in the public good to fund education for kids, but for the private good often for adults. And I would say that isn’t the case, and in the future I think we need to change our mindset,” Norton said.

Rep. Joe Atkins (DFL-Inver Grove Heights) called the accounts a “neat idea,” but wondered whether the state’s projected budget deficit made it inadvisable to implement the program right now.

Sen. Kathy Sheran (DFL-Mankato) sponsors the companion, SF147, which awaits action by the Senate Business, Industry and Jobs Committee.