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Legislative News and Views - Rep. Dale Lueck (R)

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Significant tax reform, funding for roads and bridges in House budget proposal

Friday, March 24, 2017

Dear Neighbor,

On Monday, the House released our proposal for the next two year budget. The plan includes about $44.9 billion for state agencies over the next two years. That is about $1 billion less than what Governor Dayton proposes to spend.

Currently we have a $1.6 billion projected surplus in tax revenue. The House plan would significantly reduce the excess taxes that continue to flow into the state coffers by reforming and reducing a variety state mandated taxes.  

An area I have worked hard on for several years is reducing the state income tax collected on senior citizens social security retirement benefits. I am pleased to report our plan would reduce those taxes on seniors by about $269 million over the next two years. We would also reduce the state general business tax by $203 million on small businesses, allowing them to use those dollars to invest in more employees, higher wages and updated equipment.

There is also $167 million in tax relief for low-income families, college students, farmers and additional child & dependent care credits.  These reforms will slow, but not stop the current inflow of excess tax revenue. We can make that adjustment and still maintain our current rainy day fund balance of $1.6 billion (that is separate from the $1.6 billion projected surplus).

We also will set into motion a 10-year plan to invest an additional $6 billion in roads and bridges. We begin with $450 million in new transportation funding this biennium. Of particular importance to our area is new transportation funding that would reach our small cities with a population of less than 5,000.

Another idea of mine that is included in the transportation funding bill is permanently dedicating the sales taxes we already pay on auto and truck parts and repairs to roads and bridges. In contrast, the governor continues to propose $3.6 billion in a new gas sales tax and increased auto registration fees.

The House budget plan also includes $1.1 billion in additional funding for K-12 schools over what was spent during the past two years. We are blessed with more students in our schools, that and other important factors require we continue to invest in our children’s education.

This is a very broad overview of the budget discussions that are underway, as we work through the details of each agency budget I will provide more information.

Sincerely,

Dale

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