Soccer stadium help attached to omnibus tax bill heading to Ways and Means

The House omnibus tax bill grew in scope Friday with a couple of amendments — one that would provide some tax exemptions for the proposed St. Paul soccer stadium, and another that would increase the education tax credit to apply to private school tuition.

The House Taxes Committee approved HF4 and moved it to the House Ways and Means Committee. However, DFLers, through a number of amendments, tried unsuccessfully to bring in proposals that would make the bill more palatable to the minority party and the governor.

Rep. Greg Davids (R-Preston), chair of the committee, is the bill sponsor.

Currently absent in the bill, but supported by Gov. Mark Dayton, is funding for expansion of the state’s working family refundable credit to align it with the federal earned income tax credit.

Rep. Greg Davids

Rep. Diane Loeffler (DFL-Mpls) tried unsuccessfully to make the case for the provision, saying that about 372,000 families use the funds to “help them manage some bumps in the road.” She would pay for the credit by eliminating the bill’s proposed expansion of the estate tax, “which benefits about 1,100 very wealthy people a year.” The amendment was defeated 13-6 along party lines.

Rep. Paul Marquart (DFL-Dilworth) cautioned that while there are “a lot of good things in this bill,” it needs to be “right-sized,” if it is to become law.

“I want a tax bill this year. The state wants and needs a tax bill. We know as we move forward, we are going to have to make sure we right-size this a little more, ­as we move down the process and think about the strategic targeted cuts that are going to do the most good,” he said.

Amendments successfully attached to the bill would:

• provide a $3.3 million sales tax exemption on materials used to build a proposed $150 million Minnesota United FC soccer stadium near the intersection of Interstate 94 and Snelling Avenue in St. Paul, as well as a permanent property tax exemption for the site;
• make private school tuition eligible for the education tax credit at a $23 million cost to the state’s General Fund for the biennium;
• establish a transportation priorities fund for deposit of motor vehicle-related sales taxes that would be used to fund road and bridge projects as called for in the bill; and
• allow for a credit against taxes for employer-provided fitness facility expenses.

Rep. Steve Drazkowski (R-Mazeppa) successfully offered an amendment that would eliminate the Greater Minnesota Internship Tax Credit Program. Citing a Feb. 21, 2017, Department of Revenue report, Drazkowski said it is a tax credit that is “flailing and failing.”

Enacted in 2013, the $2,000 tax credit is available to eligible businesses that employ student interns. According to the report, the number and amount of credits claimed has fallen below original projections and the ongoing cost of the program does not correspond to its reach.

Davids said the new provisions added to the bill would not increase the committee’s $4.76 billion 2018-19 spending target.

While there is no Senate companion to HF4, the Senate has put forward their spending targets that would commit $900 million to tax initiatives. Sen. Roger Chamberlain (R-Lino Lakes) is chair of the Senate Taxes Committee, and would most likely sponsor any Senate counterpart to the House bill.