Ingebrigtsen: Governor's tax bill introduced
Editor's note: The following is a weekly summary from State Senator Bill Ingebrigtsen, R-Alexandria, about his work at the Legislature.
Nearly a month after the Governor's budget plan was rolled out, the Senate finally saw the introduction of the governor's tax bill. Authored by Senate tax chair Rod Skoe, Senate File 552 confirms the details of Governor Dayton's recommendations, notably $3.6 billion in new taxes including a $2.1 billion tax increase through an expansion of sales tax on new goods and services like clothing, auto repair, haircuts and digital downloads.
On Thursday, February 21, all DFL Senators present voted to support this multi-billion dollar tax bill by moving it forward. All Republicans voted against the bill and the increased taxes it would bring on all Minnesotans.
Concerns continue about the impact of new sales taxes on Minnesota retailers and families, and there are growing concerns about new "business to business" sales taxes in the Governor's plan. Many of Minnesota's top employers and economists highlight the fact that Minnesota would join only three other states that broadly impose such a tax, making Minnesota less competitive and having a chilling effect on the state's job climate.
In other important tax developments this week, Governor Dayton signed the first tax bill of the year. This federal tax conformity bill will come as a relief to nearly 250,000 Minnesota taxpayers seeking clarity of the state's tax laws as they complete their 2012 Minnesota tax returns. Of note, this conformity extends the educator classroom expense deduction, extends the higher education tuition deduction, and extends tax-free IRA donations to certain public charities for taxpayers age 70 1/2 and older.
While tax relief received broad bi-partisan support, the bill was jeopardized by a couple of late, controversial additions. One such Senate DFL amendment insisted the bill strike a requirement that the Department of Revenue include information on the federal tax burden faced by Minnesota residents when completing the department's "Minnesota Tax Incidence Study." This little-known report is nonetheless an important window into who pays taxes as legislators consider Minnesota tax policy. Senate Republicans unanimously opposed this DFL proposal and contended that review of the combined state and federal tax burden recognizes every tax dollar paid by Minnesota families is important. This provision was ultimately included in the final bill approved by the Governor.
The Judiciary Committee turned its focus this week to firearms, and began holding informational hearings on many bills that have been introduced in the Senate. It is expected that the chairman will make his recommendations for an omnibus bill in the coming weeks, and votes on any provisions would be held at a later date. The bills mainly centered on topics of proxy purchasers, background checks, mental health, and other similar topics. To date, no bills have been introduced in the Senate that ban or limit the possession of semi-automatic military-style assault weapons (SAMSAWs) or size of magazines.
Health and Human Services
The Medical Assistance bill (SF 5) was signed into law by the Governor. This new law expands Medical Assistance coverage for persons up to 138 percent of the federal poverty guideline. Some members expressed concerns about the bill because the expansion is offered by the federal government under the Affordable Care Act. While the federal government says they will pay for the cost of newly eligible enrollees for the first few years of the program, the expansion will cost an unknown amount down the road that the state will be expected to cover.
State and Local Government
A proposal authored by Sen. Bruce Anderson calling for state recognition of a new "Honor and Remember" flag had its initial Senate hearing this week. The Honor and Remember Flag recognizes all individuals who have died as a result of serving in the United States military dating back to the founding of our nation. Supporters of this national initiative hope for the flag to be congressionally and militarily sanctioned as a permanent symbol of remembrance of fallen military service members and their families. Emotional testimony from a Minnesota Gold Star Mother brought home to committee members how important this effort is to the many families of fallen members of the armed forces.