Conforming Minnesota’s tax code to the new federal tax code is one of the top priorities for both the legislature and governor’s office. This will be a complicated and controversial task. Full conformity would mean an increase in taxes for almost every Minnesotan, while no conformity would make filing taxes extremely complicated and lengthy. 

 

The governor has released his tax proposal, which features a small income tax cut for about 2 million Minnesotans. Other provisions include increasing the estate, tobacco, and business property taxes, and also maintaining the MinnesotaCare Tax Extension. Within the legislature, only the House has released its tax bill, which varies significantly from the governor’s. Overall, the House tax bill includes a higher standard deduction for more tax-free income and an increase in the allowable property tax deduction. However, the biggest news from the House plan is a proposal to cut the second-lowest income tax bracket from 7.05 percent to 6.75 percent by 2020.  

 

For the House and Senate, the main spending proposed in this area is $15 million for border-to-border broadband grants. However, these spending targets are half of the governor’s proposal of $30 million. 

 

The Governor has also proposed $172,000 in wage theft penalty increases. The Senate did not include increased wage theft funding in their proposal, however, the House did propose $200,000 in wage theft prevention. 

 

 

As it currently stands, both the House and Senate are still taking public testimony for their respective bonding bills. Legislative leaders have indicated they are willing to support a bonding bill around $800 million dollars. This falls significantly short of the governor’s bonding bill proposal, which totals up to $1.5 billion. The breakdown of the governor’s bonding bill is $1.05 billion to repair and improve state and local assets (including money for affordable housing development), and $541 million for higher education.