Tax conference committee begins work
The conference committee working out the differences between the House, Senate, and Governor’s tax proposals met four times this week. However, without a budget target – a universally agreed to amount of money the tax budget will raise and spend in the next budget cycle – there is little substantive work to accomplish.
The meetings thus far have included an overview of each body’s spreadsheet, policy language, and provisions that are largely identical in each bill. The House budget raises about $1.2 billion, largely by leveling tax obligations between average Minnesotans and corporations. Their bill invests much of the new revenue into income and property tax relief for low- and middle-income Minnesotans, including doubling the state standard deduction and improving the Working Family Tax Credit. The Governor’s tax proposal raises about $800 million through largely the same mechanism and also focuses on broad income and property tax relief, including increased aid to local governments and property tax credits for farmers employing buffer strips.
The Senate tax proposal raises about $613 million, omitting a few corporate tax loophole closures that DFLers believe are important, and takes a hit-or-miss approach to tax relief. Some – mainly higher earners and corporations – fare well, while low-income filers and property tax payers are entirely left out.
There are areas of agreement as well. All three bills provide a level of increased tax relief for Social Security recipients. All bills propose conforming new, more generous federal rules for Section 179 expensing, which helps businesses and especially farmers in this tough economy.
The committee must compromise on one tax bill to send to the Governor before May 20.