Neighbor,
Massive tax changes at the federal level are presenting us with some serious challenges in terms of adapting at the state level, something that needs to be done sooner rather than later.
The House has responded by approving a bill that would simplify Minnesota’s tax code and provide additional tax relief to middle-class Minnesotans. The legislation also includes the first income tax rate cut for Minnesotans in nearly two decades by reducing the second tier income tax rate.
By simply conforming to federal changes, nearly 970,000 Minnesota filers would have ended up paying more. We did all we could to hold harmless as many people as possible and ended up with a good bill.
Overall, the House bill delivers the first income tax cut in nearly 20 years and more than 2.1 million Minnesota filers will benefit from a tax cut in tax year 2018.
Highlights include:
- Helping middle-class Minnesotans keep more of what they earn by cutting the second tier income tax rate from 7.05 percent to 6.75 percent by tax year 2020. This would mark the first income tax rate reduction in Minnesota since 2000.
- Lowering taxes for people at all income levels by increasing the standard deduction for all filers.
- Protecting families by preserving a state personal and dependent exemption of $4,150.
- Encouraging affordable homeownership by allowing a state-itemized deduction of up to $30,000 in property taxes.
- Supporting hometown businesses and farmers by reinvesting extra revenue from corporate tax changes into Section 179 conformity and overall rate reductions.
In contrast to the House’s legislation to simplify and reduce taxes, a report from the Minnesota Department of Revenue shows that tax changes proposed in Gov. Mark Dayton’s supplemental budget would raise taxes on Minnesotans of every income level, and make Minnesota's tax code more regressive.
Last week I mentioned the House had passed a bill to improve our methods of protecting Minnesota’s natural wild rice beds and water resources. The Senate followed up by passing the bill as well and now a conference committee is expected to form in order to iron out differences between versions the House and Senate passed.
As a refresher, this bill would replace the obsolete sulfate standard with a reasonable, enforceable rule based on sound science and with a broad base of collaboration. This would help us do better to protect, enhance and restore natural wild rice within Minnesota. Let’s also keep in mind that if the 45-year-old numeric sulfate standard were applied today, it would create millions of dollars in unwarranted costs to rural municipal waste water treatment plants across Minnesota.
On a final note, I want to say how thoroughly disappointed I am in MnDOT’s announcement this week regarding its list of Corridors of Commerce projects it approve for this year. All four of the projects are located within 50 miles of the Metro area. That’s $469 million being spent within a stone’s throw of the Twin Cities, while Greater Minnesota is completely overlooked.
There were 172 projects up for consideration in what is supposed to be a statewide program, but the agency selected four locations a stone’s throw from their own offices. Do they really wonder why people sour toward government?
-Steve