The pace of the 2017 legislative session has substantially increased. Regularly scheduled committee hearings have been coming to an end and the days of spending hours at a time on the floor of the House has begun. On Thursday, the House passed a $1.35 billion tax relief bill aimed at reducing the tax burden on our seniors, students, recent graduates, farmers, small businesses, and in general, all middle class Minnesotans by providing $100 million in direct property tax relief for homeowners and renters, as well as fully funding current levels of Local Government Aid/County Program aid.
Other highlights of the bill include:
- $269 million in relief for Minnesota’s senior citizens by increasing the income limit at which social security income is taxable. Under current law, seniors making more than $32,000 for a married couple or $25,000 for an individual must pay taxes on social security income. Under the House proposal, that threshold would increase to $61,000 for a married couple and $46,500 for a single filer in tax year 2018 and $72,000 for a married couple and $56,000 for a single filer in tax year 2019. As a result, by 2019 nearly 284,000 senior citizen tax returns (single and married filing jointly) would be eligible to receive a tax exemption on their social security benefits with an average tax reduction of $710.
- More than $125 million to address college affordability through a first-in-the-nation tax credit for student loan payments, along with subtractions and credits for families saving for college using 529 Savings Plans. Through the student debt tax credit, 77,500 students will receive on average a $640 reduction in their taxes.
- $42 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service. Farms will also benefit from a measure conforming the state death tax to the federal exclusion.
- $35 million for families with young children by modifying the child & dependent care credit. A family of four earning $50,000 a year will receive an addition $1,200 toward their childcare expenses.
- $203 million in relief for hometown businesses by exempting the first $200,000 in property value from the extra tax on businesses and freezing its automatic inflator. This helps every business owner reinvest in their business, protecting 30,000 Minnesota jobs.
I am proud of the bill we passed and I am optimistic that a fair compromise will be reached when the House Tax Bill and the Senate Tax Bill differences are discussed and sorted out in conference committee. I am hoping that Governor Dayton feels a sense of urgency to sign a substantial tax relief bill, considering the tax relief bill of last session that passed a Republican House and a DFL Senate was ultimately vetoed.
If you ever have any questions, comments, or concerns regarding any issue related to state government, please feel free to contact me at either 651-296-8237, or email@example.com.