In 2014, Minnesota homeowners will experience the largest property tax reduction in twelve years and will begin to benefit from the most significant reform of homestead taxation in at least three decades. The final property tax after refunds paid by the typical homeowner with a median income residing in a median value home will decline by over ten percent from 2013 to 2014 in the majority of Minnesota communities.
The Tax Conference reached a tentative agreement just before midnight Wednesday on the contents of the second tax bill. That agreement will provide $103 million in tax relief in the current biennium (FY 2014-15) and $119 million in the next biennium. This relief is on top of $443 million (current biennium) and $956 million (next biennium) provided in the first tax bill enacted in March. Continue Reading
This year’s House Omnibus Tax bill improves on reforms made last year to city Local Government Aid (LGA). In 2013, policymakers made significant improvements to the aid formula and increased the appropriation to partially replace what was lost over the preceding decade. However, that bill failed to finish the job of LGA by annually adjusting the appropriation to keep pace with inflation and population growth. Continue Reading
On Monday, progressive state policymakers and fair wage supporters were in a celebratory mood, as Governor Dayton signed into law the first Minnesota minimum wage increase in nine years. Under that law, the hourly minimum wage will be gradually increased to $9.50 ($7.75 for small employers) by 2016 and indexed for growth in the cost of living beginning in 2018. While the new minimum wage law is a big win, more needs to be done to reverse the tide of growing income inequality.
Ten days ago, Governor Dayton signed into law the first tax act of 2014, which focused largely—but not exclusively—on time-sensitive items which needed to be enacted quickly. That act disposed of about half of the projected FY 2014-15 budget reserve through tax reductions and budget reserve increases. Now a second tax bill is working its way through the legislature. Last week the House Tax Committee passed its second tax bill of the 2014 session, which now awaits action by another committee before going to the House floor for passage. Some of the provisions of the second House tax bill (as of March 31) are outlined below. Continue Reading
In an effort to reduce small business property taxes, a proposal in the Minnesota House would exempt the first $150,000 of taxable value of each business from the state business property tax. This provision is part of a second round of tax legislation, approved by the House Tax Committee yesterday, that was not part of the new tax law enacted last week; that law contained “rush” federal conformity provisions that needed to be enacted in advance of the April 15 tax filing deadline as well as other time-sensitive legislation. The second tax bill currently working its way through the House will contain other tax provisions that are less urgent, but still important. Continue Reading
The legislative stalemate on minimum wage indexing continues. By way of a refresher, House and Senate negotiators appear to have agreed on increasing the minimum wage to $9.50 per hour. However, negotiators remain deadlocked on the subject of “indexing” the minimum wage to the Consumer Price Index (CPI) so that the purchasing power of the wage keeps pace with cost of living in future years. Continue Reading
Yesterday, legislative committees heard two tax relief proposals that deserve serious consideration during the 2014 session. They are Senate File (SF) 2484, which would increase the Working Family Credit and a house bill,* which would provide a one-time increase in the Homestead Credit Refund and the Renters’ Property Tax Refund (PTR). Continue Reading
Statewide property taxes will drop from 2013 to 2014, according to new information from non-partisan Minnesota House staff, heralding the first year-to-year property tax decline in over a decade. Credit for this goes squarely to progressive state policymakers who enacted major property tax relief legislation in 2013, including a new homestead credit refund and significant increases in school aid and other state aid to local governments.