SAINT PAUL, MINN—On Monday, June 6, 2016, Governor Mark Dayton let time expire and vetoed a bipartisan tax bill. The legislation would have provided more than $800 million in tax relief including half a billion in ongoing, permanent tax relief for middle-class Minnesotans. The measure had support of 89 percent of the legislature, passing 123-10 in the House and 55-12 in the Senate.
Representative Kelly Fenton (R-Woodbury) released the following statement regarding the governor's veto of the tax relief bill:
"I have been an advocate for meaningful bipartisan tax relief for Woodbury's hardworking taxpayers, and I am frustrated that the governor chose to block this legislation over his demands for a number of new spending projects. From a first-in-the-nation student loan tax credit to small business tax relief to helping reduce the cost of child care for working families, this bill had something for almost everyone. I will continue to work for the people and priorities of our community and support returning money to you through tax relief."
Key provisions in the vetoed tax bill include:
- $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. In 2016, about 52,300 graduates would be eligible for the credit.
- $49 million in tax relief for families who contribute to 529 plans to save for their children's college costs. An estimated 21,000 families would claim the credit in tax year 2016. An estimated 40,400 families would claim the subtraction (some taxpayers would be eligible for both).
- $146 million in tax relief for every small business in Minnesota by exempting the first $100,000 of commercial-industrial property.
- $13 million in tax relief for Minnesota veterans by raising the income eligibility threshold, and increasing the total credit from $750 to $1000.
- $150 million in tax relief for working families by expanding the working family tax credit. Nearly 386,000 families would be affected in tax year 2016.
- $32 million to reduce the cost of childcare by expanding the childcare tax credit, families could earn a tax credit up to a $960. For tax year 2016, the number of families receiving the credit would be 41,400.
- 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.