Senate Passes $900 Million Tax Relief Plan

With a projected $1.6 billion dollar state budget surplus, Senate Republicans set a priority of passing a $900 million dollar tax relief measure, and they carried through on their plans Monday April 3, by passing the omnibus tax bill on a 40-27 vote.

Sponsored by Tax Chair Roger Chamberlain, R-Lino Lakes, the bill would lower the state lowest income tax rate of 5.35 percent to 5 percent by 2018. It also would provide property tax breaks to farmers, ease small business taxes, offer tax credits to college graduates with loan debt, and cut income tax on social security benefits.

Much of the Senate debate focused on a provision in the bill that would provide tax credits to organizations offering scholarships for low income students interested in leaving their public school for a private institution. Senator Kari Dzeidzic, DFL-Minneapolis, offered an amendment in an attempt to remove the provision. In support of her proposal, Senator Jeff Hayden, DFL-Minneapolis, said, "But at the end or the day, we are giving a tax credit to very wealthy corporations and people to give money, more than likely what they are already doing...and now we are enhancing that process."

In defense of the provision, Chamberlain said, "We're saying, let's give some kids a chance."

The Senate and House will resolve their differences in conference committee. The House plan totals about $1.35 billion dollars in tax reductions, and Governor Dayton proposes $280 million dollars in tax reductions.

The debate on the bill lasted about 7 hours. The featured video presents closing comments on the measure.