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| Date: | May 19, 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 TAX CONFERENCE COMMITTEE REPORT Tax bill maintains LGA funding, makes targeted reductions and does not raise taxes |
(St. Paul) -- Following approval from the Minnesota House of Representatives, the Minnesota Senate approved the tax conference committee report on Thursday morning. The budget impact of the report shows tax reductions of $203 million for Fiscal Year 2012-13 and tax relief of $30 million for homeowner property tax refund program. Overall, the conferees agreed to a 26 percent reduction out of a $3.5 billion budget for tax aids and credits.
“Our proposed budget includes a seven percent overall increase in state spending, without raising taxes,” said Senator Julianne Ortman (R-Chanhassen), Chair of the Senate Tax Committee. “Seven percent should be more than enough to fund state government.”
“The conference committee agreed upon several important provisions while maintaining our core commitment to not raise taxes,” said Senator Ortman. “Since the tax committee’s budget consists entirely of property tax aids and credits, the primary reform measures are aimed at minimizing the impact of reductions to property taxpayers across the state and avoiding increasing income and sales taxes to pay for increased subsidies to local governments.”
Compromise reached by the House and Senate will reduce the statewide business property tax by $50 million in FY 2012-13 and $120 million in FY 2014-15. The conference committee report also includes a number of provisions to encourage economic growth and job expansion. These provisions include a $34.8 million expansion of the research and development tax credit and an initial reduction and later phase-out of the statewide business property tax.
A key provision included in the bill brings Minnesota’s tax laws into conformity with the Bush tax cuts for 2010, including elimination of the marriage penalty.
Other notable provisions include:
• Provides an average 10 percent increase in refunds for eligible lower and middle income homeowners through the homeowner property tax refund program with $29.8 million in FY 2012-13, $65.9 million in FY 2014-15.
• Allows tuition to be included in eligible expense for tax credit for low income families through the K-12 education tax credit effective tax year 2013 by $10.7 million.
• Effective in 2013, military retirement income tax exclusion is included at a rate of $24 million.
• Tax relief for estate taxes, small businesses and farms to encourage small business succession planning and family farming.
• Local Government Aid and County Program Aid funding is held flat from 2010 appropriations, except for the three largest cities.
Ortman added: “We have focused on growing our state’s economic future by protecting family and business budgets. We are encouraging economic growth by cutting and eliminating tax burdens for individuals and businesses, while preserving the core relief programs for Minnesota.”
The complete conference committee report can be viewed at:
https://www.revisor.mn.gov/bin/bldbill.php?bill=ccrhf0042A.html&session=ls87
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