I blogged earlier today about how some of the ideas from the vetoed omnibus tax bill (House File 2337) have found new life in two other tax bills moving today at the Legislature.
- House File 247 includes many provisions from House File 2337 in a scaled-back form. This bill was passed by a conference committee this morning.
- Last night, the Senate added a few other provisions from House File 2337 to House File 2690, a technical corrections bill, which was then passed by the House this afternoon.
I blogged about House File 247 earlier this afternoon. Now a look at House File 2690. In addition to the original technical provisions, the bill includes a few ideas from House File 2337:
- Cities with populations of 5,000 or more will have their 2013 Local Government Aid payments frozen at 2012 levels. Smaller cities will receive the larger of what they received in 2012 or what they would get in 2013 under the current aid formula. This cuts LGA funding in FY 2014 by $1 million.
- The bill also increases the targeted property tax refund for homeowners by $4 million in FY 2013. This refund is available to homeowners whose property taxes increase by 12 percent and at least $100 over the previous year. It has no income limitations to qualify. (The provision in this bill applies to refunds in 2012 only. A smaller increase in the targeted property tax refund starting in 2013 is in House File 247.)
- The increase in the targeted property tax refund is paid for by a $4 million transfer from a special revenue account at the Department of Revenue, a provision that was also part of House File 2337.
Unlike House File 247, this bill doesn’t add to our future revenue shortfall.
Looking at the two tax bills moving today and those that preceded them, the most damaging tax proposals did not make it into law, such as the House’s deep cuts to renters’ property tax refunds and phased-in tax cuts that over time would have cost the state billions of dollars. Such proposals would harm struggling families and put investments in our future prosperity at risk.
But the Legislature didn’t make much progress on the challenges before us. We still have a tax system that is inadequate to fund our state’s priorities, and still asks low- and moderate-income Minnesotans to pay more than their fair share.
Next year, we’ll have an opportunity to do better.
-Nan Madden