Dear Neighbor,
The House this week has been focusing squarely on bills related to the state’s next two-year budget. I have been working closely on this process a member of two major House finance committees and Ways and Means, the final stop for all bills with finance implications.
In all, there are 11 omnibus finance packages of bills which make up various components of the state budget and we have begun the process of bringing them to the House floor for votes of the full body.
The first to come up for a vote was the House tax bill, which was approved Thursday. In all, it provides $1.35 billion in tax relief over the next two years, larger than plans offered by either the Senate or Gov. Mark Dayton.
The single-largest provision in the bill is a $270 million reduction on the state Social Security income tax. Minnesota is an outlier in the fact it is one of very few states in the nation which fully taxes Social Security. This bill would go a long way toward helping our seniors.
Other provisions in the bill include:
- $203 million to reduce the extra state property tax on small businesses, exempting the first $200,000 in property value from the extra tax on businesses and freezing its automatic inflator.
- $35 million going toward modifying the child and dependent care credit. A family of four with childcare expenses would be estimated to receive $660 in relief.
- More than $125 million would go toward addressing college affordability. Families saving for college using 529 Savings Plans will 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.
- $42 million to reduce the burden agriculture land owners pay for school bond referendums. Farms also would benefit from a measure conforming the state death tax to the federal exclusion.
The House on Thursday also approved an omnibus bill related to the environment and natural resources. Today we are debating the transportation and K-12 education bills, and I'm hopeful we will have them passed before we adjourn so that we can keep the momentum we have built to keep things moving toward the final adoption of all the budget bills.
Sincerely,
Bob