Tax relief heads to Governor’s desk, Senate DFL sinks bonding bill over light rail train

ST. PAUL, MN—The Minnesota House adjourned sine die Sunday evening, officially concluding the 2016 legislative session. The House and Senate passed several bills, including more than half a billion dollars in permanent, middle-class tax relief and historic tax breaks for Minnesota’s veterans.

“Over the past two years, I have worked hard to represent our rural communities in St. Paul,” said Representative Jeff Backer (R-Browns Valley). “The 2016 legislative session was built on the significant achievements from 2015 that included generational reforms in the way rural nursing homes are funded as well as historic levels of education funding. This year, we were able to continue this good work and pass a tax bill and supplemental budget bill that continues to improve our communities in Greater Minnesotan and puts more money back in the pockets of middle-class Minnesotans.”

In the next three years, the tax bill provides relief in the amounts as follows:

  • $90.6 million in agriculture property tax relief for Minnesota farmers
  • $110 million in tax relief for college graduates paying off student loans through a refundable tax credit up to $1,000, the first of its kind in the country.
  • $49 million in tax relief for families who contribute to 529 Plans to save for their children’s college costs.
  • $146 million in property tax relief for every small business in the state by repealing the commercial-industrial property tax on the first $100,000 of property value.
  • $13 million in tax relief for veterans by raising the income eligibility threshold, and increasing the total credit from $750 to $1,000.
  • $150 million in tax relief for working families by expanding the working family tax credit
  • $32 million to reduce the cost of childcare; by expanding the childcare tax credit, families could earn a tax credit up to $960.
  • $40 million increase per biennium for Local Government Aid

The House passed a supplemental budget bill that includes important provisions that:

  • Excludes military retirement pay from state income tax calculations
  • Makes historic investments in broadband expansion
  • Adjusts the reimbursement rate for rural ambulances

The Minnesota House also passed a bonding bill with $696.5 million in funding for roads and bridges on a bipartisan vote of 91 to 39. In a political maneuver, the Senate DFL majority failed to pass the bonding bill and prevented funding from going to a number of important road projects around the state including:

  • $12.5 million for Small Cities Road Assistance, a new program established by House Republicans in 2015
  • Funding for township roads
  • Flood mitigation projects in Browns Valley and Ortonville
  • Funding for the Public Facilities Authority that could go towards improvements at the Morris and Breckenridge water treatment facilities

“It is unfortunate that the Senate DFL chose to effectively kill this year’s bonding bill over funding for a controversial light rail project in the Twin Cities,” said Backer. “I will continue to prioritize our roads and bridges as we work to ensure that Minnesota continues to be an outstanding place to live, work, and raise a family.”