Last biennium, the legislature and governor raised billions in new taxes and state government spending increased by 12 percent—three times faster than economic growth. This isn't a sustainable way to govern, nor is it a responsible one.
This session, House Republicans have passed omnibus bills that will keep state government growth in check, making sure government spending isn't increasing faster than your family's budget. What's more, our budget will invest in our priorities like road improvements and education while still offering middle class families, veterans, college students, aging adults and small businesses $2 billion in tax relief.
First, for families in our community, our tax plan will offer relief through a new state version of the personal or dependent tax credit, which would save a middle class family of four $500 over the next two years. There is also millions for K12 and pre-kindergarten expense deductions and more money to help families saving for future college expenses. There is additional money for college students with new tax credits for principal and interest student loan payments as well.
What's more, for seniors and aging Baby Boomers, our tax proposal will phase-out the tax on social security, greatly benefiting Minnesotans living on a fixed income. Additionally, there is also $9.5 million allocated for tax credits to help people saving for future long-term care costs.
As the Chair of the Veterans Committee and as a long-time advocate of exempting military pensions from income tax, I am thrilled that our tax bill provides relief to Minnesota veterans too. In total, the legislation earmarks $51.6 million to exclude up to $20,000 of veteran pensions as taxable income. This provision, if signed into law, will attract more veterans and their families to our state, benefiting and strengthening our economy.
Finally, for our local businesses, there is $453.3 million to phase-out the statewide general property tax which will lower prices for consumers and increase wages for employees. And to encourage entrepreneurs and start-up businesses, we've expanded the research and development tax credit and the Minnesota Angel Investment tax credit as well.
Our $2 billion tax relief legislation was debated and passed off the House Floor recently with bipartisan support. And while there are numerous positive tax policies within the bill, it's also important to note what did not make the final cut.
During the debate on this legislation, an amendment was offered that would have added Governor Dayton's gas tax proposal to the bill. It was unanimously opposed in the House by both Democrats and Republicans. With a majority of Minnesotans opposing a 16 cent per gallon increase on the price of gasoline, I am glad the House shot down this unnecessary and regressive tax increase.
In all, our Tax Bill will benefit middle class families, spur our state's economic growth, and give $2 billion in tax relief to the people who deserve it most—hardworking Minnesota taxpayers.