Saint Paul, MN. – Today, the Minnesota House of Representatives passed, HF 1938, the 2023 Tax conference committee report. Collectively, the bill delivers the largest tax cut in state history with credits, rebates, and other provisions designed to maximize benefits for workers, families, and seniors. It also addresses years of rising property taxes and underinvestment in local communities by providing millions of dollars in property tax relief and direct assistance to local communities. These critically needed provisions are paid for through the state’s historic surplus and new revenue from revenue capture measures which target the wealthiest corporations and individuals in the state.
“The taxes conference committee has worked hard to craft a tax budget which invests in the Minnesotans who need it the most, while maintaining fiscal responsibility and sound management. Our budget accomplishes this and more, creating a Minnesota where those who received the least profit and financial gain over the past few years are returned the aid they deserve,” said Rep. Aisha Gomez (DFL - Minneapolis), Chair of the House Taxes Committee. “We have a very strong bill here which will make Minnesota a better and more equitable state. Thank you to our Senate counterparts who partnered with us to craft a strong final bill.”
Minnesota has experienced a stellar economic recovery since the COVID-19 pandemic, but this has not been felt equally. Workers, families and seniors have experienced tighter budgets as wages have failed to match rising costs. That’s why the House DFL Tax bill prioritizes these Minnesotans. The bill includes full Social Security state income exemption for those earning less than $100,000 annually (married/joint) or $78,000 (single/head of household), phasing out at $118,000 for single filers and 140,000 for joint filers. It also includes direct rebates of $260 per person, with an additional $260 for each dependent (up to three) reaching more than 2,562,300 Minnesotans to help them meet day-to-day expenses. In a strong show of support for families, the bill provides for a new and simplified Child & Working Family Tax Credit of up to $1,750 per child which will impact more than one million families and reduce child poverty by one-third.
“With a historic budget surplus, we are bringing forward the largest tax cuts in state history. Our bill contains tax cuts in the form of credits, rebates, and other provisions that will help Minnesota workers, families, and seniors,” said Speaker Melissa Hortman. “The DFL budget invests in Minnesotans’ priorities of education, health care, economic security, and the safety and vitality of our communities. With much of the surplus being one-time money, investing in these areas now and into the future requires an ongoing commitment. We’re proposing to make the tax code more fair and more progressive to provide sustainable funding for education, health care, transportation, and so much more.”
As state and federal governments have been unable to fully fund various services, local governments have been forced to make up the difference in property taxes. Property taxes are regressive and have disproportionate impacts on Minnesotans with low or fixed incomes. The House DFL’s Tax bill delivers hundreds of millions in property tax cuts and direct assistance to local communities, including measures to reform the Renter’s Property Tax Refund program, incorporating the credit onto income tax filings, resulting in an additional $378 million back to renters over the next two years. The bill also includes expansion of the Homestead Credit Refund, targeting an additional $41 million of assistance annually to homeowners who will benefit the most. It also contains an additional $80 million for Local Government Aid and $80 million for County Program Aid to help local communities deliver critical public services while keeping property taxes in check.
“I’m extremely proud of the compromise we reached on the Tax bill in conference committee, which will deliver the biggest tax cut in state history, benefitting workers, families, and communities across the state,” said Rep. Dave Lislegard (DFL – Aurora), the chair of the House Property Tax Division. “The bill tackles rising property taxes, protects the economic well-being of seniors, and provides substantial and ongoing support to cities and counties so they can deliver essential public services we all rely on. This bill is a testament to our ability to take bold, meaningful action, but to do so in a well-balanced way that benefits all of us, no matter where we live in this great state.”
The recent economic recovery has been vastly disproportionate resulting in unprecedented inequality. In order to lift up the Minnesotans who need and deserve it the most the House DFL Tax Bill implements new tax fairness measures. These include Global Intangible Low-Taxed Income which will raise $816 million, domestic reduced Deductions for Dividends Received which raises $239 million over two years, a phaseout of Standard/Itemized Deduction, 10% for earners over $304k and 20% for those over $1 million, and a millionaire tax on Net Investment Income.These increased contributions are integral to making a stronger and more equitable Minnesota.
“Members who voted for this tax bill voted for the things Minnesotans value and need to live their lives,” said House Majority Leader Jamie Long. “Democrats have assembled a bill that will improve the lives of Minnesotans across the state. We’re building a more equitable tax system where we deliver more benefits to the people who are struggling to meet their basic needs.”
A spreadsheet of the bill can be found here. Video of the floor debate will be uploaded to the House Information Youtube page.