The first days of the 2014 session have been full of good news – from budget surpluses to tax cuts to falling property taxes. I’ll fill you on what’s been happening at a breakneck speed here in St. Paul.
A “no-mirrors” budget surplus
In its latest economic forecast, the Office of Minnesota Management and Budget revealed that Minnesota is in its strongest structural budget position in more than a decade. For the 2013-14 biennium, we have a $1.2 billion surplus – a $408 million improvement over what was forecast in the December forecast. MMB also projects a $2.6 billion surplus in the 2016-17 biennium.
Minnesotans are optimistic about the direction of our state. We’re recovering from the Great Recession faster than most states. In 2013, we added more than 50,000 jobs, regaining all of the jobs that were lost since 2008.
Think of it: Just a year ago Minnesota faced a $600 million deficit and an $800 million IOU to our schools. But, in 2013, the legislature passed an honestly balanced budget that invested in education, jobs and property tax relief, and we are finally seeing progress. Our schools are paid back, our economy is growing, and we have a strong surplus.
Our job this session is to make sure that all Minnesotans share in the recovery and that we continue to move our state in the right direction.
Providing tax relief
One way to continue our progress is through the tax bill that was approved by the House on Thursday.
The bill provides $200 million in middle class tax cuts to hundreds of thousands of Minnesotans through federal tax conformity. The “Marriage Penalty Fix” provides $111 million for middle-income married families by increasing standard deductions for married filers. More than 650,000 families – a vast majority of them earning less than $75,000 – will see an average tax decrease of $120.
There is $36 million in the bill for low-income working families by matching the state’s Working Family Credit with the federal Earned Income Tax Credit.
More than 50,000 working families will see an average savings of $300.
The bill also provides:
· $7.2 million for homeowners who refinanced or had a short sale.
· $3.9 million for new homeowners.
· $26.4 million for students and parents paying for college and students paying off loans.
· $1.8 million for Minnesota families with dependents.
· $400,000 for adopting families.
· $1.1 million for 60,000 teachers.
· $6.7 million for businesses by making filing taxes simpler.
· $4 million for charitable contributions.
The bill also repeals business-to-business taxes that were passed as part of the 2013 budget – taxes on warehousing and storage services, commercial equipment repair and telecommunications equipment.
The bill awaits Senate action now. Hopefully, it will take it up quickly, and we can start providing tax relief quickly.
Cleaning out our state’s statutory closets
The Governor unveiled his unsession agenda this week. His goal is to make government more efficient and effective by simplifying our state statutes and improving government services.
It’s good when government runs more efficiently. Governor Dayton has identified this as one of his priorities, so I’m glad to play a role to help make that goal a reality. For the past several months I have been working with my legislative colleagues to help create a comprehensive list of government reforms. In all, the unsession agenda includes over 1,000 ways to make our government work better.
I’ll be introducing one of the bills to eliminate several outdated state boards or agencies that either haven’t met for several years or have met their statutory obligations and no longer have a reason to be in existence.
This is one simple way we can streamline government.
The orchestra is back
I am a co-author of Representative Phyllis Kahn’s bill calling for public ownership of the Minnesota Orchestra. I think after the 18-month lockout the issue merits discussion.
I was very happy that the situation was resolved and that management and the musicians were able to reach an agreement. As a fan of the orchestra, I want to hear it play.
But as a legislator, I have an obligation to ask questions. The state has invested significant resources into upgrading Orchestra Hall, and I think lawmakers and the public had the expectation that when the renovation was complete, there would be an orchestra playing there.
This issue may seem far removed from some people, but I’ve actually met with a couple of musicians of the orchestra who live in our district. It’s issue for my constituents – both those who love music and more directly for the musicians themselves who live in the area.
On a side note, I’m hopeful Osmo Vänskä will return. I think he brought the orchestra to a level of prominence internationally that it had never been at before, and he’s a great conductor.
Advocating for the Bottineau Line
I was disappointed when I saw that the Governor’s bonding proposal didn’t include money for the Bottineau Light Rail Line. But that wasn’t the final word in the bonding process.
Representative Lyndon Carlson has a bill that I’ve signed onto that will keep the process moving by including $18 million in bonding money to keep Bottineau on the table. This is particularly important since there seems to be a chance it could move up the priority list if things with the Southwest Line continue to founder.
Property tax relief
Two reports that were recently released show that the legislature's focus on lowering property taxes last year was successful. The bottom line is overall property taxes around the state will go down this year for the first time in more than a decade.
One study conducted by non-partisan House Research found that homeowners will see a $161 million property tax cut in 2014 – a whopping 4.9 percent decrease over 2013. Small businesses will also see a net property tax decrease of 2.1 percent and renters of 0.1 percent.
Property taxes are going down despite a significant number of voter-approved education levies. Eighty-six percent of the operating school levy referenda passed in 2013 – or 51 of 59 school districts. That is the highest approval rate recorded by the Minnesota School Board Association. The total increase in school levies for 2014 was $119 million.
Direct property tax refunds are expected to increase by $133 million in 2014. This direct property tax relief passed by the legislature in 2013 will increase direct refunds to nearly 500,000 homeowners and renters.
All my best,