Could Minnesotans See Up to $94M More in Tax Relief?

Published On: 20th April 2015

From the internet

Minnesota has a surplus, so now Gov. Mark Dayton has proposed an additional $94 million in tax relief as a part of the revised budget that would increase spending on college programs and preschools.

Dayton released his revised budget that distributes out money from the state’s very large surplus. From the time the governor produced his initial budget at the beginning of the year, the surplus grew $900 million. His plan would have him parceling out all but $13 million.

The governor has talked about some of what the money would be spent on. For instance, he wants to give every four-year-old the opportunity to attend a preschool program without their parents having to pay tuition. Nursing is another area in which he would provide more funding in addition to college aid and welfare grants. When it’s all said and done, nearly half of the surplus would go to education initiatives.

The new tax relief comes mainly in the form of an income tax credit for low- and middle-income families. This would allow almost 300,000 more families to qualify for the credits.

This plan contrasts a TV ad campaign by the state GOP to “give it all back,” as the ad states that every Minnesota resident is entitled to $350 of that money. Dayton, however, says it’s like candy where a person can receive quick satisfaction from the money, but it won’t help them in the long-term. He said $350 might make life better for a short while, but investing it in the future can make life better in the long-term.

This budget debate is still in the early stages. He expects the spending recommendations to be whittled down to make room for other priorities by the Senate and the House. He has admitted to strategically positioning himself ahead of the real negotiations that will take place in May. Some of the plan highlights:

  • $235 million for every 4-year-old to be able to go to preschool tuition-free
  • $174 million to help State Colleges and the University of Minnesota free undergraduate tuition for a total of two years. This means tuition would not be raised. Another #20 million would be given toward student grants.
  • $68 million to increase monthly payments to families with children who are a part of the welfare program. There has not been an increase since 1986.
  • $83 million to give nearly 300,000 families an expanded working family tax credit.
  • $11 million in additional tax credits for K-12 students so that families are able to offset the cost of transportation, textbooks, tutoring, and computers.

Some groups fighting for money were left out of the plan. Local governments don’t receive any allowances. Dayton said local governments would receive help if a separate transportation finance package is passed, which is something he is working very hard on to improve transportation in the state, particularly with the railroad.

One legislator says that the plan the Republicans plan to offer would include more money for tax cuts. The stance there is that if the state has collected too much money, it is important to ensure that it does not collect too much in the future so that so much work doesn’t have to be done to give it back and so Minnesotans are not paying out so much in the beginning. Others say that restraint needs to be used just in case the economic uptick comes to an end. Some are concerned since Minneapolis-based Target Corp. conducted a mass layoff in mid-March.