ST. PAUL – The Minnesota House is working on a series of finance bills that will set up the state’s budget for the next two years.
Tax policy is one of several major items integral to the state budget. The House package includes about $1.35 billion in tax reforms. The largest part of the bill is a $270 million reduction in the state income tax collected on Social Security retirement benefits to help senior citizens.
Rep. Dale Lueck, R-Aitkin, has authored legislation to end Minnesota’s status as one of just a few states which still fully collects from seniors by taxing Social Security. The current proposal in the House tax reform bill would be a major breakthrough for seniors.
“Many seniors receiving Social Security retirement benefits are living on very tight budgets,” Lueck said. “This reform will take some of the sting out of living on a fixed income. Minnesota is long overdue in joining the vast majority of other states who are doing what’s right by our seniors.”
Along with provisions that would benefit taxpayers throughout Minnesota, the package also includes proposals Lueck authored that are specific to District 10B. One proposal would increase the payment in lieu of taxes on county and state tax forfeited lands.
“Our counties and townships must provide roads, law enforcement, fire and ambulance services to the public properties in their jurisdiction,” Lueck said. “To lessen the property tax load on the rest of the property owners, the state provides an annual payment in lieu of taxes for those services. That has been stuck at $1.50 per acre for far too long. My proposal would provide a modest increase to $2 per acre.”
Another of Lueck’s initiatives would end what he called an unnecessary and unfair state mandate on assessor accreditation requirements.
“The vast majority of parcels our county assessors deal with in rural Minnesota are not classified as commercial properties.” Lueck said. “It makes no sense that all of our county assessors must maintain an appraiser qualification they likely will never use in their day-to-day work. We already have a sufficient number of personnel qualified in this area. This is St. Paul trying to fix something that is not broken.”
The overall House tax bill also provides $203 million in state property tax reductions targeted toward smaller business. That provision would exempt the first $200,000 in of property market value from being subject to the state general tax and also freeze its automatic inflator.
Middle-class families would benefit from $35 million in child and dependent care credit. A family of four with childcare expenses would receive $660 more relief than under current law.
There also is $125 million targeted toward addressing college affordability. Families saving for college using 529 Savings Plans would benefit from expanded subtractions and credits. In addition, 77,500 students will receive on average a $640 reduction in their taxes through a first-in-the-nation tax credit for student loan payments.
Many these provisions were included in last year’s tax bill which easily passed the Legislature. Despite 89 percent of the Legislature voting for the bill, Gov. Mark Dayton vetoed the 2016 tax bill, reportedly over confusion on a single word.