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| Date: | April 5, 2011 | | Contact Name: | Peter D. Winiecki | | Contact Phone: | 651-297-8077 | | Contact Email: | peter.winiecki@senate.mn | | For Immediate Release | |
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| MINNESOTA SENATE PASSES OMNIBUS TAX BILL |
(St. Paul) – Following an intense debate and after considering multiple amendments, the Minnesota Senate voted to pass the omnibus tax bill on a party-line vote of 37-26. Overall, the bill makes $780 million in reductions and provides $200 million in tax relief. It encourages greater accountability for local officials by lowering reliance on state subsidies and making homeowners more aware of the costs of local services.
“We are fulfilling our mission to restore the principle of limited government and reduce the footprint of state government programming,” said Senator Julianne Ortman
(R-Chanhassen), the bill’s chief author. “We are adhering to our commitment to balance the state budget deficit by living within our means. Most importantly, this bill does not raise even $1.00 in individual, sales, corporate or property taxes.”
The bill holds Local Government Aid, County Program Aid and the Renter’s Credit at current 2010 funding levels. “This bill contains no further cuts to LGA. Local officials testified to the tax committee that they have not budgeted for LGA funding levels to be restored, said Senator Ortman. “As a result, we felt it was important to make those prior reductions permanent to improve consistency, predictability and avoid making empty promises.”
Another component of the bill establishes short and long-term reforms engineered to strengthen the relationship between property taxpayers and local governments. This will be aided by adding $44 million to the Homeowner Property Tax Refund program to help middle income taxpayers who are struggling to make ends meet.
“Members of the Senate Republican Caucus have a sincere desire to promote local control and autonomy. This bill seeks to strengthen the relationship between local voters, taxpayers and their elected officials. Their residents are best able to hold them accountable for local spending decisions, not legislators in St. Paul,” said Senator Ortman. “We expect that the reductions made in this bill will not be passed along to property tax payers, but rather, will encourage further reductions at the local level. We hope this proposal will help to improve the transparency of state and local taxes paid for government benefits and services received.”
Additionally, the bill contains these tax relief provisions:
• Rolls back and phases-out the statewide business property tax by 2023 to provide relief for Minnesota’s job creators. An estimated amount of $114.9 million in relief in FY 2012-13.
• Provides new phased-in military pension exemption to recognize the service and contributions of our veterans.
• Expands Minnesota K-12 education tax credit by allowing tuition as an eligible expense.
• Provides estate tax conformity to provide relief for small business owners and farmers.
• Addresses Green Acres reform by modifying Minnesota’s rural preserve property tax program.
Looking ahead, differences in a tax bill advancing through the Minnesota House of Representatives suggest that a conference committee will be appointed to work out areas of compromise.
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