With Projected Budget Surplus, Senate OKs $900 Million in Tax Cuts

Date: April 04, 2017

 

Minnesota is projected to have a $1.65 billion budget surplus for fiscal year 2018-2019, and more than half of it would go toward a tax relief package that the Senate passed April 3. The bill now heads to conference committee.

In the wake of the surplus news, competing plans for what to do with the money began to emerge. Gov. Mark Dayton, who inherited a budget deficit when he took office in 2011, has said caution and restraint should be used to help shield the state against future economic downturns.

His proposal includes a small collection of tax cuts along with new spending to expand public pre-kindergarten programs, increase funding for public universities, and raise enrollment for MinnesotaCare. Myron Frans, Minnesota’s Management and Budget commissioner, also has urged legislators to save some of the surplus rather than use it all on new spending or tax cuts.

 Meanwhile, Senate Republicans are focused on tax relief, to the tune of $900 million, for Minnesotans.

“There are gobs of money pouring into the state coffers,” Sen. Roger Chamberlain, chair of the Senate Taxes Committee, told the Pioneer Press. “It is time to give the money, and some relief, back to the workers in this state, the farmers, the small businesses.”

 The Senate on April 3 approved:

  • Permanently cutting the state’s lowest tax bracket
  • Phasing out the Social Security income tax for seniors
  • Implementing a tax credit for college graduates with student loans
  • Exempting the first $100,000 of market value from business property tax and ending the provision that automatically raises this tax over time
  • Cutting property taxes for farmers
  • Implementing tax breaks for small businesses that are purchasing new equipment
  • Amending the estate tax

NFIB/MN supports efforts to focus on tax relief.

“We see a lot of good things in the Senate tax bill,” NFIB/MN State Director Mike Hickey said. “It contains a full conformity with the federal estate tax exemption and major property tax relief for owners of business property.

“It also makes a huge positive change in section 179 expensing by fully conforming to the new federal limit of $510,000 per year. This is tremendous progress on this issue since Minnesota was far out of conformity, allowing only a small amount to be deducted every year on equipment purchases.”

Related Content: Small Business News | Economy | Minnesota | Taxes

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