Gov. Mark Dayton has the tax reform bill the Legislature passed this session on his desk. The bill includes more than half a billion dollars in ongoing, permanent tax relief.
The reforms will benefit working families with young children, small businesses, veterans, college graduates, farmers and local governments. Key provisions include (totals are for the next three years):
- Increased Local Government Aid: $10 million annual increase in the county program; $20 million to cities
- $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
- $2,000 tax credit for parents of a stillborn child
- $91 million in tax relief for Minnesota farmers
Tax reform was a priority and this bill delivered that reform by reducing taxes by about $801 million over the next three years.
Reforms were implemented while still leaving about $300 million of surplus revenue in place for transportation needs and the ability to make the annual payments on a $990 million capital investment bonding bill.
The governor is urged to sign the tax bill as soon as possible so those measures can go into effect. More to follow soon on what was accomplished during this session.