Like many of you, we thought this legislative year was to be the year of the "unsession" - reducing government, trimming unnecessary legislation, managing the programs that are in place. Apparently, Governor Dayton has had difficulty controlling his Democrat legislators. A mountain of bills, many containing complex new policy initiatives, all hit the House floor for debate beginning next week. You can watch the legislature begin daily floor sessions by clicking here to stream video.
DEMOCRATS OVER-TAXED US; GIVE BACK 50%
One year ago, Gov. Mark Dayton and the Democrat-led Legislature passed an 8% budget increase and raised taxes on Minnesotans by $2.1 billion. The tax hikes, combined with an improving economy, have produced a surplus of $1.2 billion after finalizing the state budget. On March 21, the majority party corrected its overreach by passing a bill that sends $443 million back to taxpayers and adds $150 million to the state’s budget reserves.
Good news regarding income taxes: They are easier to file because the state’s definition of income will conform to the federal tax code. (Until 2013, the state had conformed with federal language for 25 years.) There’s one major exception: for 2013 only, the marriage penalty will not be fixed. Had the Democrats’ tax bill conformed to the federal tax code last year, 640,000 married couples would be saving an average of $112 for tax year 2013. In addition, the business sales taxes that were repealed will not be retroactive repeals, costing taxpayers $55.9 million.
Minnesota tax-filers will be able to take advantage of these federal tax code items when filing their 2013 state taxes:
< >Excluding employer-paid education assistance>Deduction of Qualified tuition and related expenses>Excluding loan forgiveness (e.g., mortgage short sales) from income taxes>Increased income threshold for the Working Family Credit>Excluding employer-paid adoption assistance>Increased income threshold for student loan interest deduction>Increased eligible expense limit for dependent care credit
ROUNDUP OF LEGISLATION
Here is a snap-shot of legislation coming through the legislative process that will likely be enacted into law:
As always, I welcome your feedback on these and other issues.