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New omnibus tax bill passed by House
Following a gubernatorial veto of the first omnibus tax bill, HF2337*/ SF1972, the House Taxes Committee chairman said that when it comes to trying to improve the state’s tax climate, “We’re never going to quit.”
Rep. Greg Davids (R-Preston), who sponsors the bill with Sen. Julianne Ortman (R-Chanhassen), is now urging Gov. Mark Dayton to sign HF247*/ SF872, a stripped-down version of the previous tax bill. A conference committee reviewed the new bill this morning, and the House passed it 73-56 this afternoon. The Senate is expected to act on the bill late tonight.
Dayton’s primary objection to the previous bill was the long-term cost of the bill’s proposed credits. It would have cost the state more than $145 million in the out years.
The General Fund impact of the new bill would be $46 million over the 2012-2013 biennium. The financial hole would be filled by a $27.9 million transfer from the budget reserve, with the rest (approximately $18.4 million) expected to be filled by cost savings achieved in other bills passed this session.
The cornerstone to the previous tax bill was a freeze on the state property tax levy paid by business property and seasonal property owners. That would have cost the General Fund $71.8 million in the 2014-2015 biennium. The new bill provides for a one-year levy freeze that would be about half that cost to the General Fund. (See the spreadsheet.)
The bill lays out several initiatives, including a Veterans Jobs Credit, modifications to the research and development tax credit and a provision that Davids said would help provide more money for student loans.
He said this bill will ride in tandem with HF2690, which was passed 100-30 by the House. Passed yesterday by the Senate, it now awaits action by the governor. This bill contains several technical language provisions needed to support proposals in the new omnibus tax bill.
© 2012 Session Daily