Minnesota is one of the highest tax state’s is the country both in terms of individual and business tax rates. There’s no need to raise taxes when we have a surplus—the Senate passed a tax relief package that helps all Minnesotans. Here are a few details from work last week in St. Paul.
Senate Passes $681 Million Tax Relief Package
The Minnesota Senate approved a $681 million tax relief bill aimed at jump-starting the economy and helping workers and small business owners recover from COVID-19. The comprehensive legislation delivers tax relief and reform without raising taxes, a sharp contrast from tax plans from House Democrats and Governor Walz, both of whom have proposed more than $1 billion in tax hikes.
“With our State’s current surplus of over $1 billion, and billions more coming from the Federal Government, this tax bill provides millions in tax relief and ensures taxes are not raised on Minnesotans. After a year of economic hardship, now is not the time to raise taxes. This is a good bill that offers targeted relief that ensures economic recovery is viable for our families and our businesses.”
The bill empowers Minnesotans and encourages economic growth. Important initiatives include full conformity to federal tax rules for the forgivable Paycheck Protection Program loans, as well as a bipartisan compromise allowing those who need relief most to exclude a portion of their pandemic unemployment benefits from their taxes. Language included also lowers statewide property taxes for job creators by increasing the statewide property tax exclusion from $100,000 to $150,000.
Additional Highlights:
- Indexes the K-12 credit and K-12 subtraction to inflation so working families can keep more of their hard-earned money.
- Extends the Angel Tax Credit by $10 million, which encourages investments in startup companies focused on high technology, new proprietary technology, and other groundbreaking fields.
- Helps struggling hospitality businesses by providing a temporary sales tax exemption to restaurants for materials, supplies, and equipment used to adapt to COVID-19 guidelines, as well as a temporary tax credit for brewers and retailers for liquor spoilage caused by COVID-19 restrictions.
- Establishes a new in-home childcare provider property tax credit to address the childcare shortage in Minnesota and incentivize more people to join the profession. The credit for providers will be equal to 50% of the net tax amount owed on the property for the current tax year.
- Emphasizes affordable housing and workforce housing with a new tax credit to bring private money into the marketplace. Through various property tax reductions, the bill also incentivizes low-income rental development.
Senate Passes Bill for Fair Elections & Funding for Veteran Services
The Senate passed the State Government & Elections omnibus budget bill—focusing on good governance, eliminating waste, promoting fair and free elections, and advancing support for Minnesota Veterans. This bill contains comprehensive funding for the two-year state government budget, which highlights the implementation of government efficiencies to rein in spending while continuing to function at its highest capacity. Improvements to election security will significantly increase integrity and transparency in Minnesota elections.
“This is a good bill that prioritizes fair elections, limits government, supports our Veterans, protects Minnesotans from any unnecessary tax increases, and most importantly, it implements the use of Provisional Ballots. After the last election, our voting process was widely criticized for not being secure enough. Provisional Ballots are included in this bill to restore trust and confidence in our voting system. All ballots should be treated equally and verified in the same way—and language in this bill ensures that is the case.”
The implementation of provisional ballots is highlighted and prioritized in this budget. Minnesota is one of only three states in the nation that do NOT provide provisional ballots on Election Day. Provisional ballots are a safe, easy measure, broadly accepted across the nation, to ensure each vote is treated equally and counted in a timely manner. Provisional ballots also prevent ineligible individuals, such as those serving a felony sentence, non-U.S. citizens, or those who do not meet residency requirements, from participating in the election and marginalizing their neighbor’s ballots.
This budget is also focused on eliminating government bloat by finding areas in the budget that have been misused, underused, or have become more efficient. It is important to continuously audit the government to ensure Minnesotans’ tax dollars are being well-spent.
Additional Provisions:
- Limit the number of state employees based on the state’s population
- Reduced funding to agencies for positions that are unfilled after 180-days
- Equitable geographic distribution of state employee layoffs
- Sale of unused state-owned COVID morgue in St. Paul
- Implementation of the Veterans Restorative Justice Act
Senate Passed a Families-Focused Health & Human Services Budget Bill.
The legislation supplies critical funding for the Departments of Health (MDH) and Human Services (DHS) while ensuring agency accountability to prevent waste, fraud, and abuse.
This bill lowers costs for prescription drugs by improving drug price transparency and allowing the importation of lower cost, Federal Drug Administration-approved drugs from partner countries. The legislation also builds off Pharmacy Benefit Manager (PBM) reforms from previous sessions to help cut out unnecessary middlemen and rein in drug costs while supporting our local pharmacies.
The budget also focuses on working families by improving maternal and newborn care with in-home nurse visits, extending Medical Assistance coverage for enrollees after delivery of a baby, and requiring a regular report on maternal and infant health. Maternal outcomes have been worsening in the United States and this report will help identify what changes could ensure women have healthier deliveries.
The Senate budget implements millions of dollars in savings to slow the large growth in Health & Human Services costs—so we have resources to invest in critical needs like local public health and childcare services.
The budget also includes appropriations for Human Services Reform—there is considerable amounts of federal funding made available for Human Services programs through the American Rescue Plan. The increased funding will go to existing federal block grants such as Substance Abuse, Mental Health, and Child Care and Development Block Grants.
Additional Highlights:
- Personal Care Attendant rate increase of roughly 20% over the Governor’s proposal, allowing more disabled Minnesotans living in their communities with their families.
- Appropriations for Home and Community Based Service Providers to help provide affordable care to people with health conditions in their own homes.
- School-linked Mental Health Grants and School-Linked Substance Use Disorder Grants so students who have been through a difficult year of pandemic strain are supported.
Great news—the fishing opener is right around the corner on May 15. Here is a reminder on aquatic invasive species: Anglers Prevent Spread of Aquatic Invasive Species
Staying in Touch
Thank you for taking the time to read my legislative update. If you’re looking to hear more from the Capitol, please like me on Facebook.
As always please feel free to contact my office with any questions you might have. My office can be reached by phone at (651) 296-4913 or at sen.carrie.ruud@senate.mn.
Talk to you soon!
Carrie Ruud