Lawmakers unlikely to meet Dayton’s tax-cut deadline
ST. PAUL -- Gov. Mark Dayton has warned that Minnesotans could lose $57 million in tax savings this year if lawmakers don’t send him a tax-cut bill for his signature by Wednesday.
Senate Democratic-Farmer-Labor leaders said Thursday that they won’t get it done by Dayton’s deadline.
Senate Tax Committee Chairman Rod Skoe, DFL-Clearbrook, said his panel still has more work to do on its tax bill, but that he expects to send it to the Senate floor for a vote by March 21.
“We are being very careful to make sure that what we do is done right,” Skoe said.
Even if the Senate passes its tax bill next week, House and Senate negotiators would have to resolve their differences to assemble a final tax-cut package. That typically takes days, if not weeks.
Dayton said state Revenue Commissioner Myron Frans set Wednesday as the deadline for making changes that his agency could process to handle income tax returns, which are due April 15. But the governor added that the department might be able to handle a one- or two-day delay.
“Anything beyond that gets to be more problematic,” he said.
If lawmakers don’t act quickly, he told reporters during a conference phone call, “you’ll definitely be hearing, and the people of Minnesota will be hearing, more from me about this subject next week.”
The governor wants lawmakers to pass legislation providing $301 million in new income tax deductions by making state tax law conform to the federal government’s tax code. Those tax breaks would apply retroactively to 2013 income.
If the tax cuts are delayed until later in the spring, Dayton acknowledged taxpayers could file amended tax returns to claim refunds. But he said that would create a lot of confusion.
“Frankly, after the problems we had with the efficiency of MNsure,” he said, “the last thing I want to see is another one of those kinds of lack of efficiencies in implementing tax refunds that people would be entitled to.”
The rollout of MNsure, the state’s health insurance exchange, in the fall was plagued by website problems, long wait times at its call center and application processing errors.
The House passed a $503 million tax-cut bill last week that matches most of the federal deductions. Skoe said the Senate is headed in the same general direction.
“We’re planning on tracking closely with the governor on retroactivity,” he said.
But senators are looking at cutting taxes less, he said, while accomplishing the same goals as Dayton and the House.
The governor said lawmakers also must act soon to prevent a sales tax on warehousing services from kicking in April 1, as scheduled. The House bill would repeal that tax, but Skoe said senators still haven’t decided whether to scrap it.
Senate Majority Leader Tom Bakk, DFL-Cook, said senators are “going to do our due diligence” to make sure any tax cuts don’t create future budget shortfalls.
“This is more than just about the people that have some urgency to file their income tax returns,” Bakk said. “This is about what is good tax policy not only in the current tax filing year but in the out years.”
The Pioneer Press is a media partner with Forum News Service.