New state budget forecast due today; House panel OKs $500M tax cut bill - Bring Me The News

New state budget forecast due today; House panel OKs $500M tax cut bill

Author:
Publish date:

A new Minnesota budget forecast is due Friday morning, and lawmakers are hopeful that it will predict a bountiful surplus.

The last forecast, released in December, suggested a surplus of roughly $1 billion, and there typically is not a big difference between the late-fall and late-winter forecasts, the Associated Press notes.

Ahead of Friday's estimate release, lawmakers have been hatching plant for the surplus money, setting the stage for work in the legislative session that just got under way Tuesday.

Among the options: cut taxes, increase spending or put money aside for a rainy day. That last option seems to have momentum as lawmakers look to prepare for the next economic downturn, the Star Tribune reports.

Meanwhile, the DFL-controlled House's tax panel on Thursday wasted no time rushing to approve a package of tax cuts that they say will save middle-class Minnesotans and businesses roughly $500 million.

The bill is set for action in the House Ways and Means Committee and a full House vote is expected as early as next week on the measure, which has bipartisan support, House Speaker Paul Thissen, DFL-Minneapolis said.

Gov. Mark Dayton supports the measure, although the bill's fate in the DFL-controlled Senate was not immediately clear; Senate Majority Leader Tom Bakk, DFL-Cook, has expressed reservations about tax cuts he fears could create future deficits, the Pioneer Press reports.

There's urgency because the legislation has federal conformity language that could impact the taxes that state residents are filing now for the April 15 deadline, lawmakers say.

"I feel the need for speed. We have to get going here," said Rep. Greg Davids of Preston, the top Republican on the tax committee, the Pioneer Press reports.

The bill would trash three business-related taxes approved just last year, on warehousing services, telecommunications equipment and on commercial equipment repairs, including farm equipment.

The legislation also would offer some tax relief to families by scrapping a "marriage penalty" that would save roughly 650,000 families an average $120.

The Pioneer Press notes the measure also:

– Raises a "working family credit" by $36 million, which would reduce taxes for more than 50,000 families by an average of $300.

– Offers deductions for college tuition and paying off student loans that would save students and parents an estimated $26.4 million.

– Gives low-income families with dependents $1.8 million in tax savings. About 25,000 families with incomes under $38,570 would receive an average $65 tax cut.

Next Up

Related