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Minnesota currently has a $9.25 billion budget surplus, a low state unemployment rate, and increasing corporate profits, all indicators the state has recovered strongly from some very challenging …
Minnesota currently has a $9.25 billion budget surplus, a low state unemployment rate, and increasing corporate profits, all indicators the state has recovered strongly from some very challenging days during the low point of the pandemic. Still, significant difficulties remain for workers and families, especially costs that continue to rise. Minnesotans notice higher prices at the grocery store and at the gas pump daily, and are paying more for major expenses like health care, child care, and housing.
House DFLers are taking the opportunity our surplus gives us to develop a tax plan strengthening the way of life for workers, families, and seniors, especially those who have been working harder, but seeing their dollar not go as far due to high costs and wages that while rising, aren’t keeping up.
Considered in totality, the proposals in the plan represent the largest property tax cut in the last 20 years. House DFLers are expanding the Homestead Credit and reforming the Renter’s Credit, resulting in $275 million in annual direct property tax cuts. Local Government Aid and County Program Aid increases will also help keep property taxes in check while ensuring important public services can continue, as will my legislation to increase Payment in Lieu of Taxes (PILT) payments for counties and modernize the formula.
Our plan helps young families with a $3,000 Great Start Child Care tax credit for each child five or younger, an increase in the Student Loan credit to $1,400, and a $325 child tax credit rebate for each child 17 or younger. As an example, a married couple who rents, with two kids, and earns less than $140,000 jointly would see $7,300 in savings, making a huge difference in a world where they’re struggling with high costs.
Meanwhile, Senate Republicans have put forth a proposal tilted in favor of the richest. In fact, over 500,000 Minnesotans would see no benefit at all from the Republican proposed income tax changes. Their proposal to entirely eliminate the social security income tax will have an oversized benefit for the richest. While we all want to help seniors better afford their lives, a more targeted approach – including measures to help seniors stay in their homes and assure they have access to quality health care – will give us a better bang for the buck. Under the DFL plan, no senior citizen who earns $75,000 or less per year will pay a dime in income tax on their Social Security payments.
Don’t get me wrong: I don’t object to people being successful. But when middle class folks are struggling, we need to prioritize our resources where we can have the most benefit. When young families are struggling to afford child care, their mortgage payments, and student debt, millionaires don’t need a tax cut. Using such a sizable chunk of the surplus for oversized tax cuts also squeezes out investments needed to help make Minnesota schools once again world class, tackle health care costs, deliver greater investments in public safety, and other priorities to build a state that works better for everyone. This is illustrated by Senate Republicans’ lack of meaningful investment in schools this year.
We have choices to make, and our choices should be based on our shared values as Minnesotans. The value that hard work ought to be rewarded. The value that everyone deserves a fair opportunity to succeed. The value that everyone deserves access to quality health care, excellent education, and a place to call home.
To move any legislation to the governor’s desk will also ultimately take a degree of compromise. Knowing this, it’s deeply disappointing to see the initial proposal from Senate Republicans so tilted in favor of the very wealthiest as opposed to families, workers, and senior citizens who deserve a level playing field.
Minnesotans are counting on us to help them address a variety of rising costs. Let’s make sure we’re targeting the help where it would make the biggest difference for the people who need it the most.
Rep. Rob Ecklund, a DFLer from International Falls, represents District 3A in the Minnesota House, where he chairs the Labor, Industry, Veterans and Military Affairs Finance and Policy Committee. He can be reached at 651-296-2190.
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