We are halfway through the 2013 legislative session. I want to provide an update on legislation that has been signed into law and legislation that will be debated in the coming weeks and months.
One of the first orders of business for the legislature was to pass tax conformity legislation earlier this session. The bill conforms to new federal income, franchise, and property tax refund provisions for tax year 2012. The federal regulations that Minnesota conformed to for tax year 2012 include extending the higher education tuition deduction, extending the educator classroom expense deduction of up to $250, and extending the authority for individuals age 70 ½ years old or older to transfer up to $100,000 from an IRA or Roth IRA directly to a qualified charity. Tax conformity is necessary to get Minnesota’s tax system in line with federal law. We had to act quickly on this legislation in order to provide early filers proper tax deductions. This bill will save taxpayers an estimated $18.5 million when filing their 2012 taxes.
Another key piece of legislation that has been signed into law is Medical Assistance Expansion. This bill will expand health care coverage to an estimated 40,000 low-income, uninsured Minnesotans. The federal government will pay 100 percent of the costs of the program until 2016, phasing down to 90 percent after 2020. Medicaid expansion was a high priority because it will provide healthcare to additional Minnesotans at a very low cost to the state.
Governor Dayton recently signed Health Insurance Exchange legislation into law. The exchange is an online marketplace where Minnesotans will be able to compare and purchase health insurance. The exchange is a product of the Federal Affordable Care Act. States were given the choice to create and implement our own health insurance exchanges or to use the one-size-fits-all Federal exchange model. Minnesota chose to create our own exchange to better suit the needs and expectations of Minnesotans.
The exchange will serve 1 out of every 5 Minnesotans and save middle-class families over $1 billion. 300,000 uninsured Minnesotans are expected to gain insurance coverage by 2016. Enrollment in the Minnesota Health Insurance Exchange begins October 1, 2013 and coverage will start January 1, 2014.
In addition to these bills, Governor Dayton has signed numerous bipartisan procedural and non-controversial bills this session.
Looking to the future, the legislature will be spending much of its time passing budget bills. We received House budget targets last week and must put together a comprehensive budget that adequately funds priorities and closes the $627 million budget deficit. Finance committees will be reviewing budget proposals and deciding which policy bills to fund this session. It is important that we end the cycle of budget deficits that have faced our state 8 out of the last 10 years. It’s time to provide structural balance to the state budget into the future.
In addition to the deficit, the legislature must pay back the $854 million that we owe our schools. The House budget has made room for this investment and I believe that we should pay back our schools in addition to providing funding for new education initiatives such as all-day kindergarten. The House budget invests an additional $700 million in early-childhood through college education and it is likely that we will see some additional education initiatives to strengthen Minnesota schools.
A variety of other proposals may come up this session, including minimum wage legislation. There are multiple minimum wage proposals moving through the legislature to raise Minnesota’s minimum wage of $6.15. We are 45th in the nation in minimum wage and have fallen behind Wisconsin, Iowa, and North and South Dakota. Some of the proposals being considered would tie the minimum wage to inflation, a measure intended to match wages with the cost of living. 9 states have indexed their minimum wage to inflation or cost of living.
The legislature is currently on mid-session break and will resume legislative business on Tuesday, April 2. The legislature is set to adjourn no later than Monday, May 20, 2013.
Please contact me directly with any questions, comments, or concerns on these legislative issues. I can be reached by phone at (651) 296-4255 or by email at email@example.com.
Lyndon R. Carlson
Crystal, New Hope and Plymouth