$650 Million Dollar Tax Relief Leads Budget Action

The Minnesota Senate began work on all of the ten remaining budget bills with passage of a $650 million dollar tax relief plan, sponsored by tax chair Senator Roger Chamberlain, R-Lino Lakes.

Under the bill, nearly $117 million dollars is directed at reducing income taxes on senior citizens, mainly through the elimination of taxation on social security benefits. Another $55 million dollars is aimed at lowering college costs by providing a tax credit on student loan payments and subtractions for 529 savings plans.

Also, $34 million dollars is directed to farmers by reducing property taxes paid for approved school bond referendums. Another $36 million dollars is added to the child and dependent care credit; $30 million dollars for Local Government Aid and $51 million for County Program Aid, which assists local governments in avoiding property tax increases. Finally, $95 million dollars is aimed at businesses by exempting the first $100,000 in property value from the extra tax on businesses and freezing its automatic inflator.

Proponent of the bill indicated that the tax relief plan provides the largest tax cut in two decades, while opponents of the bill expressed concern over the size of the relief, which impacted the amount of expenditures in health and human services, education and other state government functions.