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Memorial Day note and a session recap

Friday, May 27, 2016

Dear Neighbor,

The 2016 legislative session is now in the books but, before I get to that, I want to wish you a good Memorial Day weekend as we honor our nation's fallen soldiers. Please be safe if you are traveling and/or if you are out on the water this weekend.

A top accomplishment from the recently concluded session is tax relief to the tune of $801 million over the next three years. This is a step in the right direction after Democrats rammed a historic tax increase into place just a few years ago when they had one-party control in St. Paul. Provisions House Republicans led to passage this year will benefit working families with young children, small businesses, veterans, college graduates, farmers and more. Key tax relief includes (totals are for the next three years):

  • $150 million in tax relief for working families by expanding the working family tax credit. This reduces the tax burden for an estimated 386,000 low- and middle-income filers
  • $110 million in tax relief for college graduates paying off student loans through a refundable tax credit up to $1,000, the first of its kind in the country
  • $49 million in tax relief for families who contribute to 529 plans to save for their children's college costs
  • $146 million in tax relief for every small business in Minnesota by exempting the first $100,000 of commercial-industrial property. This is projected to save Minnesota businesses $115 million in the next biennium
  • $13 million in tax relief for Minnesota veterans by raising the income eligibility threshold, and increasing the total credit from $750 to $1000
  • $32 million to reduce the cost of childcare by expanding the childcare tax credit, families could earn a tax credit up to a $960
  • Federal conformity provisions that allow Minnesotans to deduct higher education tuition expenses, mortgage insurance premiums, classroom expenses for teachers, charitable giving (for seniors), and more
  • $91 million in tax relief for Minnesota farmers

Minnesota has a $900 million surplus because taxpayers have been overcharged. It is good to see we did the right thing by returning money to those people. This bill is still in the hands of the governor for enactment and I urge him to sign it soon.

There also are some loose ends from the session regarding a bonding/transportation bill the House passed with wide, bipartisan support Sunday night, only to have it stalled by Senate Democrats' last-minute maneuvering. Just as the midnight Sunday legislative deadline approached – and just after the House adjourned – Senate Democrats changed the bill by adding a light-rail train provision. That meant the bill could not receive final approval in the Legislature and now the governor would have to call a special session for that package to be re-examined.

As of now, it is unknown when the governor will make an announcement on that. I'll pass along more on that as details surface.

Have a good weekend,

Tom

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