Politics and Government

MN Senate GOP plan proposes tax cuts for all, initially using budget surplus

A man in green tie talks at news conference
GOP Sen. Roger Chamberlain, chair of the Senate tax committee, outlined a plan to give back the state budget surplus to taxpayers on Thursday in St. Paul.
Tim Pugmire | MPR News

Republicans in the Minnesota Senate on Thursday outlined a package of proposed tax cuts worth more than $1 billion that they say would benefit everyone in the state.

The plan would use the projected $1.3 billion budget surplus to pay for the cuts initially, but the plan would create ongoing financial obligations for the state.

“This is fundamentally about people. It’s not just about numbers,” said Sen. Roger Chamberlain, R-Lino Lakes, who chairs the Senate tax committee.

The plan would reduce the state’s lowest income tax rate — paid by all taxpayers — from 5.35 percent to 4.9 percent. The change would benefit people at all income levels at an estimated annual cost of about $440 million, Chamberlain said.

A proposed elimination of the tax on Social Security Income would cost another $430 million.

There are also expanded education tax credits and help for farmers purchasing equipment.

“This is about relief for everybody,” Chamberlain said.

Sen. Ann Rest, DFL-New Hope, criticized the proposal as premature. Rest, the lead DFLer on the tax committee, said tax proposals should wait until the release later this month of an updated economic forecast that will show the size of the state’s budget surplus. She also said the GOP proposal is too expensive.

“It’s a dreamer’s wish list without any details on how it would be paid for,” Rest said.

Senate Republicans did not include a proposed tax break on donations to programs that help disadvantaged students change schools, even though the so-called Opportunity Scholarships had been a GOP priority.

Senate Majority Leader Paul Gazelka, R-Nisswa, blamed the change on strong opposition from DFL Gov. Tim Walz, who has described the proposed scholarships as private-school vouchers.

“We’re going to look at other ways that we can try to address that disparity gap,” Gazelka said.

Rest offered her own theory on the retreat.

“I think they realized that instituting a program of vouchers in Minnesota is not acceptable in Minnesota, and for once they listened,” she said.

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