Legislative Notebook: House OKs Matching Minnesota Taxes With Federal

Wills, Wiger

By Don Davis

Income tax returns Minnesotans file this spring will conform to new federal laws if state senators follow the House’s Monday action.

The House voted 127-0 to change state law to match newly enacted federal tax legislation, saving taxes for 55,000 teachers, 90,000 homeowners, 60,000 students and 32,000 small business owners. Supporters say it will save Minnesotans $18.5 million.

The new federal law established deductions that are not allowed under Minnesota law. Monday’s bill matches the two systems, giving Minnesotans more deductions, such as teachers who buy classrooms supplies with their own money, homeowners who claim an itemized deduction for mortgage insurance premiums, students who claim tuition deductions and business owners who qualify for some deductions.

The Senate has not taken up the issue. Until senators also pass the bill and the governor signs it, Minnesota taxpayers affected who already filed returns could be forced to file an amended return to get their credits.

Vets’ job help

Minnesota lawmakers will debate legislation to give businesses credit for hiring military veterans, with a goal of getting Minnesota veterans’ unemployment rate lowered.

A business would get a $3,000 tax credit for hiring a disabled veteran, $1,500 for an unemployed veteran and $500 for any other veteran.

Rep. Anne Wills, R-Apple Valley, said the aid would be “a drop in the bucket,” but when added to other tools available to veterans it could help them find work.

Twenty-three percent of Minnesota veterans do not have jobs, compared with a 6 percent statewide unemployment rate for all types of workers. That is about 30,000 veterans.

“We owe it to our veterans to do better,” Wills said.

Wills and Senate bill sponsor Sen. Chuck Wiger, DFL-Maplewood, said they do not know how much the tax credits will cost the state. However, they said the increase in taxes paid by newly employed veterans would offset whatever is lost by allowing tax credits.

U administration review

The University of Minnesota plans to spend $48,000 to examine its administrative structure.

The decision by the university’s Board of Regents to hire a consulting firm comes as some Minnesota lawmakers are questioning how much is spent on the university administration.

A private firm will review the layers of administration from top to bottom and the number of employees that directly report to each supervisor, the university reports. A goal of the study is to see if the university structure can be simplified.

“In short, the analysis will answer the question: Does the university have the appropriate number of organizational levels and do managers at various levels oversee the proper number of people?” university President Eric Kaler said.

A national news story recently said the university pays too much for administration, an issue that often arises this year when school officials go in front of legislative committees.

Legislators told Kaler to report back on the issue March 15.

Off-shoring upsetting

Sending jobs overseas upsets Minnesota unions, which say 2,525 Minnesota jobs were lost last year either by so-called off-shoring or increasing imports.

The union-based Minnesota Fair Trade Coalition says Minnesota lost the seventh most jobs of any state.

“Minnesota communities have been hit hard by off-shoring over the years, and the data shows that that trend doesn’t seem to be slowing,” said Steve Hunter, secretary-treasurer of the Minnesota AFL-CIO.

Down on tax

A poll shows Gov. Mark Dayton has a sales job to do if he wants Minnesotans behind his plan to lower the sales tax rate while adding the tax to services.

SurveyUSA-KSTP reports 55 percent are against the budget proposal the Democratic governor released three weeks ago, with 35 in favor and 10 percent not sure.

Even more, 59 percent, are against a proposal for businesses to pay a sales tax on services provided by other businesses. However, Minnesotans were nearly evenly divided about whether to charge sales tax on clothes valued at $100 and more.

On the other hand, Dayton’s proposal to tax the top 2 percent of wage earners gained support of 65 percent of Minnesotans.

When it comes to non-money issues, the poll showed Minnesotans generally like some gun-control measures being discussed by lawmakers and 54 percent do not want lawmakers to overturn a law banning gay marriages.

January funds good

Minnesota’s January state revenue was up 8.3 percent more than expected.

Minnesota Management and Budget on Monday announced individual income taxes were up nearly $140 million last month. Sales taxes also were up, but corporate taxes were down, leaving the total increase at $140 million.