ST. PAUL, MINN. – On Friday Sen. David Tomassoni (DFL-Chisholm) voted to pass the Senate’s omnibus tax bill, which provides tax relief to businesses and hard-working Minnesotans. At the same time, the bill also calls for a transfer of $150 million into the state’s budget reserves. The bill passed with significant bi-partisan support with a vote of 58-5.
“We really got the best of both worlds with this tax bill. By conforming to many parts of the federal tax code, hundreds of thousands of Minnesotans will see more money in their pockets, and by repealing the business to business taxes, businesses will also see considerable savings,” said Sen. Tomassoni.
Up to 400,000 Minnesota taxpayers filing taxes this year could see lower tax bills — and in some cases, higher refunds — because of federal tax conformity changes included in the bill. Among the changes include an increase in the Working Family Tax Credit, eliminating the marriage penalty beginning next year, student loan interest deductions, higher education tuition deductions and deductions for K-12 educators who invest their own money into their classrooms.
“These changes will make a real difference in the lives of Minnesotans. Our state’s economy continues to strengthen, and our forecasted budget surplus allowed the Senate to craft a tax bill to give money back to taxpayers,” said Sen. Tomassoni.
Another portion of the bill provides a new funding mechanism that will benefit Iron Range schools. The cooperatively operated school account was created to help Iron Range school districts repay the debt service on bonds issued for qualified school projects or other disbursements approved by the IRRRB. New revenue in the account would come from taconite production taxes, mining occupation taxes, and a three-year allocation from the Taconite Environmental Protection Fund. Ultimatley this would help the Virginia, Mountain Iron-Buhl and Eveleth-Gilbert districts co-locate and build a combined 7-12 school.
The tax bill also transfers $150 million into the state budget reserve in July and sets an automatic threshold for future surplus revenues. This will increase the state’s total reserve to $810.9 million; it’s a move Sen. Tomassoni strongly supports.
“While times are good now, it wasn’t that long ago that a larger reserve would have greatly benefited our state. By saving now, we can help make recessions and downturns in the economy less painful,” said Sen. Tomassoni.
Sen. Tomassoni welcomes additional questions or comments; you can contact him at Sen.David.Tomassoni@senate.mn or by calling his office at (651) 296-8017.