By Don Davis
Tax cuts may come to those who wait.
Democrats who control the Minnesota Legislature were fired up and ready to cut taxes Thursday, but Senate Republicans refused to allow a $432 million tax-cut bill come up for a vote, saying they and the public had not had time to read it.
“I think as a senator, I have the right to read the bill,” said Sen. Scott Newman, R-Hutchinson, saying he first saw the bill an hour earlier when the 62-page bill still was hot off the copy machine.
“Folks, they want us to do it and do it right,” Sen. Bill Ingebrigtsen, R-Alexandria, told fellow senators about the desire of Minnesotans that lawmakers know what is in the bill before voting. “We need more than a couple of hours; Minnesotans expect that.”
Both senators and representatives are expected to vote on the bill today.
Revenue Commissioner Myron Frans said his department had been working on making the many changes needed as more and more taxpayers file returns ahead of their April 15 deadline, but that work stopped Thursday when the tax bill stopped.
“Every day matters,” Frans said, adding that he could not give specifics about how the day delay will affect taxpayers.
About 40 percent of Minnesota taxpayers file their income tax returns between April 1 and April 15, and on Thursday, Frans said so many changes in tax laws are contained in the stalled bill that his department, tax preparers and software companies face a mountain of work to keep up.
Minnesotans who already have filed returns may need to amend them if they want new tax cuts contained in the bill.
Senate Majority Leader Tom Bakk, D-Cook, suggested that taxpayers who think they might benefit from the changes should wait until next week to send in their returns. Frans and Gov. Mark Dayton refused to make any such recommendations.
Most cuts in the Senate bill center on two areas:
– Rewriting some state tax laws to conform to federal law, which would lower many Minnesotans’ income taxes.
– Overturning business sales taxes last year’s Legislature approved, including those placed on farm equipment and other commercial repair work, some on technology sales and a warehousing that was to take effect April 1.
House and Senate bills would make more than 50,000 low-income families eligible for larger benefits under the Working Family Credit designed provide work incentives. More than 280,000 students would qualify for new student loan deductions.
The legislation would provide tax breaks for adoptive parents, homeowners facing foreclosure and teacher classroom expenses.
During a hastily called news conference, Dayton thanked Bakk and Senate Tax Chairman Rod Skoe, D-Clearbrook, for trying to pass the tax bill Thursday, which was a day after a deadline the governor had given lawmakers.
Two days earlier, Dayton chastised Democratic Senate leaders for delaying the bill. He said Bakk refused to bring up the tax bill until lawmakers approve a new Senate office building.
On Thursday, Bakk accompanied Dayton to the news conference as they criticized Republicans for delaying the bill.
A two-thirds majority of senators was needed to suspend the rules, and without GOP votes, there were not enough Democrats to begin the tax debate. The vote was 38-28.
“There are provisions in this bill that some of our members have not seen…” Senate Minority Leader David Hann, R-Eden Prairie, said. “We think tomorrow is just fine.”
The Senate is to take up the tax bill when it convenes at 9:30 a.m. today, and if it passes, the House expects to take it up later in the day. House Republicans gave no indication they plan to delay the bill.
The Senate Taxes Committee passed the bill Thursday morning, minutes before the full Senate convened.
Skoe said that the bill balances a desire to trim taxes with the need to increase state budget reserves.
“The state is in the best financial state it has been in since 1999 and I do not want the state to return to the financial uncertainty of the 2000s,” Skoe said.
Skoe also has been part of a Senate effort to increase state budget reserves $150 million to provide a cushion in case there are fiscal problems.
The House passed a $503 million tax cut on March 6 and Democratic Gov. Mark Dayton wanted them cut $616 million. Another tax bill is expected yet this legislative session, which must end May 19, and it could include deeper cuts.
Key points of a Minnesota Senate tax bill include income and business tax cuts.
– Total net tax cuts: $432 million.
– Change state tax law to match federal law and increase Working Family Tax Credit: $226 million.
– Repeal business tax cuts passed last year: $232 million.
– Repeal gift tax and increase estate tax threshold: $30 million.
Note: Individual tax cut figures do not add up $432 million because bill also includes some minor revenue increases.