ST. PAUL -- Farmers, homeowners, renters and businesses would share $103 million in a second round of Minnesota tax cuts after negotiators worked out a compromise that is expected to pass the Legislature next week.
Lawmakers from both parties hailed the agreement Thursday, saying that it is good to send part of the state budget surplus back to Minnesotans.
One tax negotiator compared the deal to checks Minnesotans received when Gov. Jesse Ventura was in office.
"The House (property tax break) provisions were what appeared to be 'Jesse checks' before an election," Sen. Paul Gazelka, R-Brainerd, said.
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Many farmers would receive an average $200 property tax break under the measure that is a blend of tax bills the House and Senate passed. The compromise bill would send $17 million to more than 90,000 farmers, mostly those who live on their farms.
Gov. Mark Dayton told reporters Thursday that rural lawmakers tell him farmers are seeing ever-increasing property taxes.
"I think that it is appropriate to give them some relief now," the governor said.
"Farmers are going to get a new tax refund that doesn't now exist," House Tax Chairwoman Ann Lenczewski, D-Bloomington, said.
While the farm tax cut is permanent, renters and homeowners would get one-time increases in existing programs.
About 500,000 homeowners would receive 3 percent larger homestead credit refunds while those receiving renters' credit refunds would see 6 percent bigger checks.
"You can view this as supplemental relief to what we did last year," Senate Tax Chairman Rod Skoe, D-Clearbrook, said.
Negotiations on the tax bill are complete, but it will not be finalized until Monday to allow last-minute changes as the 2014 Legislature nears its adjournment.
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When combined with an earlier tax-cut bill, there would be $550 million in tax cuts.
Dayton said that he will sign the bill once it passes and legislative Republicans and Democrats express their support.
"The best way we can spend the (state budget) surplus here in Minnesota is to send it back to Minnesotans..." House Minority Leader Kurt Daudt, R-Crown, said. "We know tax cuts are popular, even among Democrats, in an election year."
While called a tax bill, Skoe said that it also helps the state economy.
"It takes more than just cutting taxes to grow our economy, and that’s why our tax relief package also invests in new workforce housing, protecting our lakes and streams from aquatic invasive species and new efficiencies for state and local governments,” Skoe said.
The bill provides $4.5 million this year and $10 million per year after that for 83 of Minnesota's 87 counties with public-access boat landings. The money is to be used by the county to help with efforts to fight plant and aquatic invasive species.
Invasive species are forcing out native species, which many in the tourism industry say threatens their businesses.
"It is a really, really important provision for much of the state," Skoe said.
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The tax bill also:
- Increases Local Government Aid to cities by $10 million to keep up with inflation.
- Allows 14 counties to take part in a pilot project to attract and retain volunteer first-responders by providing a $500 stipend.
- Provides military personnel some tax advantages.
- Gives parents and guardians of students struggling to learn to read tax credits of up to $2,000.
- Begin to eliminate a requirement that businesses pay some of the June sales tax they collect earlier than normal.
