SAINT PAUL, Minn. – Wednesday, the Minnesota House approved a package of new tax cuts, credits, and rebates to help working class Minnesotans struggling with rising costs. The majority of the benefits will benefit families with young children, senior citizens living on fixed incomes, and people with student loan debt.
Rep. Dave Lislegard (DFL – Aurora), vice chair of the House Taxes Committee, voted for the bill.
“Minnesota’s economy is recovering, but the recovery isn’t being felt equally. While unemployment is low and wages are increasing, rising costs are taking a bigger chunk out of family budgets. People on the Iron Range and across the state deserve some extra money in their pockets to help them tackle these costs,” Rep. Lislegard said. “With a historic budget surplus, we should direct resources where we can make the biggest impact, including for workers, families, seniors, and our communities. Our House Tax bill delivers the biggest property tax cut in 20 years, helps communities with new LGA funding, expands the tax exemption for social security income, and so many other targeted solutions to address some of our state’s most urgent priorities.”
The House tax bill reduces the cost of child care by providing a “Great Start Child Care Credit” of up to $3,000 for each child under five years of age, capped at $7,500 in total tax credits. It also provides a one-time “Child Tax Credit Rebate” of $325 for each child under 17 years of age.
The bill would also reduce the cost of housing by making the biggest investment in property tax refunds and renter’s credits in decades by expanding eligibility and benefits while making filing easier. As a result, more than 1.3 million households that currently qualify for the market value exclusion will see an increased exclusion, while 150,000 additional renters will qualify. Statewide, 30% of renter’s credit recipients are seniors or people with disabilities.
This session, Rep. Lislegard has worked to make social security payments exempt from state income taxes. The House tax bill greatly expands the exemption, making it possible for seniors with adjusted gross incomes up to $75,000 (married joint filers) or $58,600 (other filers) to pay no social security income tax.
Additionally, Rep. Lislegard championed a provision in the legislation making building materials for several school district construction projects tax exempt. Communities including Ely, Rock Ridge, Hibbing, and Duluth will all benefit. Rep. Lislegard’s bill to establish an Iron Range Education Account is also included in the package, modernizing the distribution of the taconite production tax.
To help communities deliver quality public services while keeping property taxes in check, the bill delivers an additional $34.2 million per year for Local Government Aid, as well as $13 million annually for County Program Aid, a $50 million increase for school equalization aid, and a modernized Payment in Lieu of Taxes formula with an additional $19 million in funding.
The bill also increases the student loan tax credit to $1,400 per person, up from $500, benefitting approximately 750,000 student loan borrowers with a total of $2.9 billion in outstanding debt.
Video of the floor session will be available on House Public Information Services’ YouTube channel.