Minnesota Legislature News: Minority Republicans in the Minnesota Legislature are advocating for $13 billion in one-time cash payments, tax cuts, and rebate checks for residents of the state up to the amount of $2,500, as well as the repeal of the Social Security income tax.
Minnesota Legislature News: The Republican minority in the Minnesota Legislature proposed a $13 billion “Give It Back” plan on Tuesday to use the majority of the $17.5 billion budget surplus for one-time and long-term tax cuts, including rebate checks and the complete elimination of Social Security taxes. (Photo via AP)
The “Give it Back” tax plan was unveiled by House and Senate Republicans on Tuesday in response to this week’s announcement that Minnesota’s more than $17 billion budget surplus has stayed consistent. The plan offers continued tax reductions for specific tax levels in addition to rebates and the elimination of taxes on Social Security benefits.
The state of Minnesota has all the money it needs. At a press conference on the Senate floor, Sen. Mark Johnson, a Republican from East Grand Forks, said, “We have an obligation to make sure the basics are covered, and we are dedicated to accomplishing that. “We’re in the black by $17.5 billion. Minnesotans should own that. It is up to them to decide how their future will turn out. It needs to be returned to Minnesotans because we trust them.
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Tim Walz, the Governor of Minnesota, is in favor of a direct payment provision included in the GOP plan. Republicans are recommending $5 billion in grants totaling $1,250 for individuals and $2,500 for couples.
Also, a one-time child tax credit worth $3.5 billion over two years would be offered. It would provide each child under the age of 18 a tax credit of $1,800.
The first- and second-tier tax rates would be reduced continuously by 1%, making them 4.35% and 5.8%, respectively.
Take Action Minnesota says no matter who is in charge, they need to remember the average Minnesota family has been slammed by rising inflation, soaring childcare costs and high gas prices. Take Action’s Trisha Harms says people need to thrive, not just survive. “The richest Americans are accumulating more wealth than ever before, while the rest of us, especially low-income Americans, are actually getting poorer.” (Photo via KNSI News)
Tax reductions of $3 billion would arise from that. A change to the homestead market value exclusion would also result in a $35 million annual reduction in property taxes.
472,902 Minnesotans would receive average tax reduction of $1,277 thanks to the Social Security tax cut. Each year, the state would lose more than $600 million in revenue.
Although though Democrats now have total control of the state’s government following the recent election, minority Republicans might still be open to negotiating on taxes. Four Senate Democrats ran campaigns calling for the elimination of taxes on Social Security, and they may join Republicans in supporting a change.
Just one Democrat could swing the vote in favor of a tax cut with a 34-33 majority. Tim Walz, the governor of the DFL, has stated that he only favors abolishing the tax up to a specific income level.
The Governor, House Democrats, and Senate Republicans claimed to have struck a budget agreement in the spring of 2022 that included getting rid of the Social Security income tax, but talks broke down at the end of the session. Only 11 states impose a Social Security income tax.
As GOP and DFL political officials were unable to come to any meaningful spending agreements before the end of last year’s regular legislative session, about $12 billion of the $17.5 billion surplus that is currently available was never spent.
Minnesota Senate Minority Leader Mark Johnson addresses reporters about Senate and House Republicans’ tax cut proposals for the 2023 legislative session Tuesday, Feb. 28.Contributed / Minnesota Senate Media Services (Photo via https://www.duluthnewstribune.com/)
On Tuesday, Republicans suggested that one further tactic they would use to put pressure on Democrats to support their proposed tax cuts was the use of bonding bills for public infrastructure. Bonding legislation must receive a three-fifths supermajority in order to be approved. It provides funds for important infrastructure projects like wastewater treatment systems around the state.
The failure of the Legislature to adopt a bonding bill during the previous session has left numerous projects across the state without funding. According to Johnson, Republicans want a bonding bill to pass but need reassurance from Democrats that tax changes will also be taken up in the Senate.
In the first week of March, the House is already scheduled to vote on a bonding package.
Republicans in the legislature and the governor’s initiatives share certain ideas, especially with the rebate checks. Walz backed payouts of up to $2,600 for millions of Minnesotans in his budget proposals from January. Walz has also advocated for increased child tax credits worth billions of dollars.
The House and Senate Democratic leadership has not yet endorsed the rebate check concept.
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The House Taxation Committee will have a hearing on the governor’s budget on March 1st, according to House Speaker Melissa Hortman, DFL-Brooklyn Park, who also noted that it is too early to predict what the House Democrats will do with direct payments.
