Minnesota House passes property tax cuts and tax refunds for families – Twin Cities

The Minnesota House of Representatives on Wednesday passed a tax plan that would provide credits for families, workers and seniors, as well as significant property tax relief and substantial increases in student loan tax forgiveness. .

A proposal sponsored by Rep. Paul Marquart, DFL-Dilworth, which passed 69-62 on party lines would provide $3.25 billion in tax cuts through 2025, though it is a cut significantly lower than a proposal approved by the Republican-controlled Senate in early April. But Marquart said the council tax bill aims to provide relief to those who need it most.

“The premise of this tax bill is very Minnesotan. It’s very nice in Minnesota,” he said. “He looks at our families, he looks at our elders and asks: how can we be of most use?”

Under the House proposal, state taxes on Social Security income would be eliminated for joint filers earning up to $75,000 and $58,600 for individual taxpayers. This contrasts with the Senate proposal to eliminate the Social Security income tax for all filers. Democrats said the Republican push to eliminate all state Social Security taxes would largely benefit the highest earners.

For families, the house plan would provide a one-time tax refund of $325 per child 16 or younger. A child care credit would provide $3,000 for each child under age 5 and would provide up to a maximum of $7,500 per year.

The proposal also includes $275 million in dollar-for-dollar direct property tax cuts, which would be the biggest cuts in 20 years, Marquart said. Student debt relief tax credits would also increase under the Democratic-farmer-labor-led plan, from the current maximum of $500 to $1,400. Marquart said 42,000 filers would be eligible.

The Senate tax bill passed April 7 would remove state taxes on Social Security payments and lower the rate of the lowest income tax bracket in the state. That proposal, sponsored by Senator Carla Nelson, R-Rochester, passed 42-24 with some support from the DFL.

Now that the House tax plan is passed, the House and Senate will likely settle differences and negotiate a final proposal in a conference committee before they can vote on anything they can send to the governor’s office. The DFL’s proposals to provide tax credits and rebates to seniors, families and others will have to be reconciled with the Senate Republicans’ proposal to cut the lowest tax rate by 5, 35% to 2.8% and eliminate the state Social Security income tax.

The clock is turning. The legislative session is due to end on May 23, and Gov. Tim Walz has said he has no interest in calling lawmakers back for a special session.

During about five hours of House debate on Wednesday, Republican representatives said the House proposal did not go far enough and that lawmakers should use the historic $9.25 billion budget surplus of the State as an opportunity to grant significant tax reductions. Representative Glenn Gruenhagen, R-Glencoe, pointed to potential indications that the economy could worsen over the next few years as the country grapples with inflation and higher interest rates.

“There are storm clouds on the horizon,” he said. “We also have higher electricity costs, higher food costs – in almost every area. Give these folks a break, cut taxes drastically, and you’ll protect yourself from the next recession.

Penny D. Jackson