SAINT PAUL, MN – Today, the Minnesota House of Representatives passed the Omnibus Tax Bill. The legislation puts an end to the decade-long cycle of deficits and includes $270 million in middle class property tax relief.
“Residential property taxes have increased unsustainably during the past decade,” said Rep. Rick Hansen (DFL – South Saint Paul). “New local government aid, the Homestead Credit Refund, and Renter’s Credit will all help hold down property taxes, while protecting essential government services.”
Under the House tax bill, South St. Paul would receive approximately $693,000 more local government aid in 2014 than under current law. West Saint Paul would gain an additional $575,000 in 2014. Those cities are project to receive $2.4 million and $1.2 million in aid, respectively, in 2015. Mendota would have its $25,000 in annual aid maintained.
Also beginning in 2014, more than one million Minnesota homeowners and renters would receive new aid. Under the bill, 75 percent of homeowners would see an increase in their property tax refund up to $371 more, while the typical homeowners would receive an additional $212. Through the Renters’ Credit, the typical refund would increase by about $152 a year.
To repay the school shift, make historic investments in education, and end a cycle of budget deficits the tax bill asks wealthiest Minnesotans to chip in a little more. The $854 million school shift is paid through a temporary income tax surcharge on the wealthiest 0.5 percent of Minnesotans, or those with taxable income greater than $500,000 per joint filers. The surcharge ends after the school shift is fully paid.
To permanently end Minnesota’s budget deficits, the bill raises the income tax rate to 8.49 percent on the wealthiest 1.1 percent of individuals (taxable income greater than $400,000 per year for joint filer). This group currently pays a smaller percentage in income taxes than low-and middle-income earners and the state hasn’t raised the income tax since 1991.
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