House Passes Its Tax Plan, Senate Next

Taxes have taken over as the 2018 Minnesota Legislative session’s No. 1 issue, thanks federal tax law changes that will affect most Americans.

The House tax plan passed 90-38 Monday, April 30, and Senate Republicans announce their proposal Tuesday morning, making it the third plan as Democratic Gov. Mark Dayton announced his wishes weeks ago.

The House Republican majority says its measure will provide 2.1 million Minnesotans tax cuts. If the Legislature and Dayton do nothing, about 300,000 would pay more.

House Tax Chairman Greg Davids, R-Preston, said the bill simplifies the state tax code by matching the new federal tax law. Without the changes, Minnesotans would need to file very different income tax returns to state and federal revenue departments.

Davids said he moved toward Dayton’s proposal, while Dayton tried to go toward majority House Republicans.

However, debate in the House showed the parties are not quite together. The gulf was especially wide about who will most benefit from the legislation: Democrats said it would be businesses, but Republicans said middle-class Minnesotans see the most gain, in part because of an income tax cut for the middle class.

“The (President Donald) Trump tax bill gave massive, permanent tax cuts to large corporations creating huge windfalls for their shareholders,” Rep. Jennifer Schultz, D-Duluth, said. “This bill continues this pattern of imbalance, cutting the taxes of corporations twice as much as the taxes of individuals.”

Like other Democrats, Schultz said Dayton’s proposal was more balanced.

Rep. Paul Marquart, D-Dilworth, added one thing is most needed to fix the House bill: “We just need to do one thing and that is to also create a victory for our working citizens and senior citizens.”

Despite what many Democrats said, Davids ended debate by saying “this bill does not cut taxes to corporations. If anything, it raises taxes on corporations.”

Farmers and small businesses would get tax breaks under the bill.

Rep. Steve Drazkowski tried to eliminate Local Government Aid from Minneapolis, St. Paul and Duluth. While his amendment passed, the provision it would have amended was withdrawn from the bill.

Drazkowski said those three cities spend LGA on things such as giving away clotheslines, bicycle riding lessons, building a solar-powered music stage and providing artist-designed fountains. Smaller cities, on the other hand, need LGA to help afford services such as fire, police and ambulances, he said.

Wild rice bill advances

The Senate has followed the House in passing a bill telling state officials they cannot proceed with rules regulating sulfate standards in wild rice area, but the debate over the issue is not over.

Before passing the measure 38-28, senators amended the legislation to pay $500,000 toward wild rice area restoration.

Rep. Dale Lueck, R-Aitkin, said he is not sure if the House will accept the Senate’s amendment.

Last week, the Minnesota Pollution Control Agency announced it would reboot its wild rice protection efforts as the Legislature looked to stop its plan and an administrative law judge told it to change plans.

Senate Majority Leader Paul Gazelka, R-Nisswa, said the MPCA’s proposal had called for a standard 25 times more strict than for drinking water.

Bill sponsor Sen. Justin Eichorn, R-Grand Rapids, said the MPCA standards were based on 1943 science. If it had been enacted, Eichorn said, it would have cost northern Minnesota communities $2 billion.

Mowing rakes in votes

One of the most-discussed farm issues got little talk in the Senate.

Members voted 53-13 to delay until 2019 enforcement of state rules that regulate mowing of state highway ditches.

“We felt if we give them another year we can get it done,” Sen. Gary Dahms, R-Redwood Falls, said.

The mowing controversy erupted when the state Department of Transportation decided to require farmers and other landowners register before they could mow ditches, and to place several regulations on them. Dahms said the extra year will give the state and farmers time to negotiate new rules.