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(AP)  A fast-tracked bill that provides tax breaks
linked to college costs, classroom supply purchases and military
combat pay unanimously passed the Minnesota House on Thursday and
could wind up on Gov. Tim Pawlenty's desk next week.
  

    Lawmakers are rushing to align Minnesota's tax code with recent
changes Congress made to federal guidelines. The goal is to get it
done before the window opens for filing 2006 returns so Minnesotans
eligible for the targeted deductions can claim them without filing
extra paperwork.

      House Majority Leader Tony Sertich, DFL-Chisholm, trumpeted the
measure's swift passage as a positive tone-setter for the session.

      "Twenty four million dollars of tax relief is not chump
change," he said.

      Despite the one-sided vote, passage didn't come without hiccups.
Minority Republicans tried repeatedly to add more tax exemptions
and a general income tax cut, putting newly empowered Democrats in
the uncomfortable spot of rejecting hundreds of millions of dollars
in tax relief.

      It signaled a brewing battle over the larger task of carving up
a projected $2.2 billion surplus.

      - An estimated 111,000 Minnesotans would be able to deduct up to
$4,000 in college tuition costs and related expenses from their
income taxes, resulting in a net savings of $165.

      - More than 53,000 teachers would be eligible for an up to $250
deduction for classroom supplies they purchase, reaping an average
tax benefit of $20.

      - Military personnel would get permission to put tax-exempt
combat pay into retirement accounts without penalty.

      The DFL-led Senate hopes to vote on the bill next week, and
Pawlenty has pledged his signature.

      Democrats said they'll consider more comprehensive tax packages
later this session, with the focus on easing rapidly rising
property taxes.

      House and Senate Republicans, meanwhile, are making no secret of
their planned push for income tax cuts.

      One unsuccesful amendment to Thursday's bill would have cut the
rate on the lowest income tax bracket by a half percentage point,
reducing it to 4.85 percent.

      "We're not talking about tax cuts for the rich," said House
Minority Leader Marty Seifert, R-Marshall. "We're talking about
the bottom rate. We're talking about the coupon cutters in every
district in the state."

      Democrats criticized the move as posturing meant to force them
into difficult votes. "So starts the food fight," Sertich said.

      Senate Republicans said at a morning news conference that they
want a cut in the middle bracket, reducing it from 7.05 percent to
6.55 percent. The reduction would affect 43 percent of the 2.63
million filers in Minnesota and cost the treasury $466 million,
said Sen. Julianne Ortman, R-Chanhassen.

      Senate Tax Committee Chairman Tom Bakk, DFL-Cook, downplayed the
chances for income tax cuts, saying he and fellow Democrats have
other designs on the surplus.

      "The public expects us to spend some of the money on health
care and they expect us to spend some money on schools and early
childhood," he said.


Gallery

Politics and Government News

Brian Bakst, Associated Press

Author

A fast-tracked bill that provides tax breaks
linked to college costs, classroom supply purchases and military
combat pay unanimously passed the Minnesota House on Thursday and
could wind up on Gov. Tim Pawlenty's desk next week.

Minnesota House moves quickly to pass tax breaks

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