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Capitol View®
Tom Scheck

Senate DFL bill cuts taxes much less than House plan

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A tax bill released by Democrats in the Minnesota Senate Monday proposes much smaller cuts than the $2 billion plan House Republicans have offered.

It's the latest example of big differences between the Senate and House as the legislative session enters its final three weeks.

The Senate bill provides about $200 million in direct tax relief. It extends an education credit for parents and provides property tax relief for homeowners who see their taxes go up more than 10 percent. It also increases Local Government Aid as a way to try to hold down property taxes.

Sen. Rod Skoe, DFL-Clearbrook, who chairs the Senate Taxes Committee,  said he also wants to help veterans struggling to find work after serving in the Middle East. The bill gives a tax credit of up to $2,500 to  businesses that hire veterans.

“There are housing issues, there are mental health issues, and we really think the best way to get at those is to help those young men and women get a job when they come back,” Skoe said.

The bill also makes a slight cut in the statewide business property tax.

Sen. Julianne Ortman, R- Chanhassen, said the bill should cut more taxes instead of increasing aid to cities and counties.

"There's a whole lot of tax relief that folks could do with a $1.8 billion surplus," she said. "A lot of it is spending in this bill."

Ortman also criticized Senate Democrats for proposing a transportation bill that raises gas and sales taxes to pay for transportation projects. A vote on that measure is expected later Monday.

DFL leaders in the Senate said they wanted to be cautious with their tax bill, especially given that some of the biggest tax cuts in the House bill are phased in, so that their impact is greater in future budgets.

“It’s not the kind of spending that will ratchet up in the next biennium. We’re trying to be very, very careful about over committing the next biennium,”  said Senate Majority Leader Tom Bakk, DFL-Cook, about the Senate plan.