Senate tax bill cuts business property taxes, asks Dayton to make cuts

Republicans in the Minnesota Senate want to cut the statewide business property tax and pay for it through unspecified cuts.

“The bill overall reduces the state’s tax burden by $102.5 million,” said Sen. Julianne Ortman, R-Chanhassen.

Ortman, who chairs the Senate Taxes Committee, said she’s leaving the decisions on what programs to cut to Gov. Dayton’s administration. Ortman said the $100 million in savings will come from the state’s budget reserve if Dayton’s Administration doesn’t find the savings.

“I think it’s easily doable by our commissioners,” Ortman said.

The bill’s biggest tax cut is to the so-called “marriage penalty.” The federal government extended a tax break and the Senate bill would make the state’s tax laws conform with that change. The change helps married couples at the cost to the state treasury of $62.4 million in fiscal year 2013.

The statewide business property tax levy would be cut by $31 million and nearly $2 million would be go to homeowners to cushion the impact of property tax increases. .

The bill would actually increase taxes on some cigarettes and on motor vehicle paint.

The proposal does not make a significant dent in the state’s budget this year but the cost would increase dramatically in coming years. For example, the business property tax levy would be reduced by $145 million in the next two-year budget cycle.

Several Democrats on the Tax Committee were skeptical of the proposal, especially Sen. Rod Skoe, DFL-Clearbrook

“If we’re going to ask the governor and his administration to have savings then I think you have to spell them out and write them down on a piece of paper and put them in the bill,” he said.

Skoe said he was dismayed that Senate Republicans were targeting the newly replenished budget reserve.

The Senate Tax bill is dramatically different from its House companion. House Republicans are pushing a bill that cuts the business property tax and property taxes for homeowners, but they pay for the cuts by reducing the tax credit for renters and by increasing taxes on corporations that operate overseas. Ortman said she won’t back either of those measures.

Ortman isn’t the only lawmaker who is looking at the budget reserve to potentially pay for priorities. Sen. Gen Olson, R-Minnetrista, is proposing to pay back $430 million of the $2.4 billion in delayed payments to K-12 schools that helped balance the state’s budget last session.

Republicans in the House have proposed taking $430 million from the reserve to start paying back the school shift.

  • davidz

    There is an enormous unpaid debt owed to the schools of Minnesota. Until you manage to get rid of that, you Republican MN legislators, please stop trying to reduce taxes further.

    You HAVE already spent that money, now you must pay for it.

    You cannot do that by reducing taxes.

  • Craig

    Personally, I love the part where the legislature cuts taxes and tells someone else to figure out how to cut spending to cover the difference. I realize the person speaking is on the “taxes committee”, but it still represents to me a new low in terms of taking responsibility for the impact of their choices and actions.

  • Jamie

    There is no end to the “new lows” of Republicans. Take the idea of paying for tax cuts for corporations by RAISING taxes on poor and working class people (renters). Those renters would also have to pay for the rise in homeowners’ property taxes caused by Republicans’ policies. Taxes SHOULD be raised on corporations that operate overseas, but that revenue should not be used to further subsidize other corporations. It should be used to restore cuts to social services and education.

  • Jim

    This is no different than how a business operates. Revenue is going down, so Department X has to decide what they can cut to make the budget balance. Happens in business every time the Legislature raises business taxes. Making the bloated, wasteful state government smaller by $100M is A-OK in my book.

    Your tax-n-spend trust-fund Governor will veto it anyway, because he has no idea what is like to spend LESS and make hard decisions because he was born rich, has never wanted for anything, and never had to work for a living. For the real people of Minnesota with no South Dakota trust fund, and with jobs and families to support, this is a welcome and overdue change.

  • Jamie

    Government is not a business, whether state, municipal, or federal. It mostly cannot operate like a business, despite Republican rhetoric and talking points to the contrary. Government must meet the needs of many people who cannot take care of themselves. It must provide services to people who are not willing to pay for those services, and who are unwilling to make cuts to THEIR favorite services but want cuts nevertheless. Government isn’t in the business of making profits, and it shouldn’t be so.

    Mark Dayton knows more about regular people’s struggles than all the Republicans put together who only care about their rich fat-cat friends and campaign donors.

    And it does no good to try to besmirch Dayton because his family put money in a South Dakota bank. We know better. He has already explained that he had nothing to do with that decision, and if I’m remembering correctly, he has moved at least some of that money to Minnesota. He also does not have as much money as he used to, and not as much as Republicans are always trying to make it sound like he has. He used a lot of his money to serve the public. He even had to sell at least one painting to help to fund his gubernatorial race. Besides, why is it ok for rich fat-cat greedy Republicans to be wealthy but it’s not ok for Dayton?

  • Minnesota Central

    Why are the Republicans targeting Auto Paint Shops for tax increases ?

    And wasn’t it just last week that the Republicans in the House were touting the lost revenues to other states because MN fireworks sales regulations and now the Republicans want to increase cigarette taxes even though our neighbors have lower cigarette tax rates.

    The Republicans have proven that they want to cut taxes but have no idea how to make up for the lost revenues.

    Not only do the Republicans increases taxes on cigarettes