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New fifth income tax tier proposed to boost local government, county aid

By Rob Hubbard
St. Paul Mayor Kaohly Her testifies before the House Taxes Committee April 29 for a bill sponsored by Rep. Athena Hollins, left, that would establish a fifth-tier income tax rate and increase aid to local governments and counties. (Photo by Andrew VonBank)
St. Paul Mayor Kaohly Her testifies before the House Taxes Committee April 29 for a bill sponsored by Rep. Athena Hollins, left, that would establish a fifth-tier income tax rate and increase aid to local governments and counties. (Photo by Andrew VonBank)

“How much is enough?” That was a central question in Wednesday’s House Taxes Committee debate over HF4845, a bill sponsored by Rep. Athena Hollins (DFL-St. Paul) that would create a new fifth income tax tier, an idea that seems to surface annually.

Hollins’ bill would establish the tier at a rate of 10.85%, applying it to Minnesota taxable income in excess of $1 million for married joint returns and $600,000 for single returns.

What’s different about this year’s model is the recipient of the revenue from the tax: It would increase local government aid (LGA) and county program aid (CPA) by $155.5 million each annually.

The bill was laid over for possible omnibus bill inclusion.
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