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Minnesota House Approves $500M Tax-Cut Bill

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(credit: CBS) Pat Kessler
Pat Kessler knows Minnesota politics. He's been on the beat long...
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ST. PAUL, Minn. (WCCO/AP) — Acting with rare speed, the Minnesota House approved a $500 million package of tax cuts and repeals Thursday in a clear sign of the state’s improved fortunes.

Barely a week into the legislative session, the House voted 126-2 to send it over to the Senate for consideration. The lopsided vote underscored the popularity of tax-cut bills in an election year, as well as the breathing room that comes with a $1.2 billion budget surplus.

But why the rush?

“The clock is ticking,” said Rep. Ann Lenczewski (DFL-Bloomington), the Chair of the House Tax Committee. “This is the time sensitive stuff we need to do right now. We need to get these middle class tax cuts to Minnesotans.”

Meanwhile, Dayton on Thursday unveiled his own $616 million tax cut that mirrors the House; breaking down the annual tax savings for:

  • Married Couples: $115
  • Itemized Deductions: $160
  • Working Families: $334
  • Day Care: $430
  • Students: $140 – $190

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Democrats are calling for repeal of a warehouse tax, a farm equipment repair tax and a gift tax: all taxes they approved just last year.

In an “I-told-you-so” moment, Republicans came to the Capitol wearing “Give It Back” buttons, expressing mock amazement at the tax cuts on the table.

“It is a day that will live in infamy,” said Rep. Greg Davids, (R-Preston), “to have Democrats running over themselves to get down to the table and see who can do it the most — and doing it enthusiastically!”

Dayton urged the Legislature to approve the tax cuts by March 14, the deadline by which he says Minnesota taxpayers can still claim tax cuts this year.

In addition to proposing a $616 million dollar tax cut, Dayton is also proposing to put $600 million in the state budget reserve.

In a conference call with reporters, Dayton said the new budgets are a “mid-course correction.”

“For those people who say that we are not using wisdom in our mid-course correction based on changing circumstances, are just out of touch with reality,” he said.

For House Democrats, Thursday’s $500 million dollar tax cut is just Round 1. Democratic leaders say they will be back in a few weeks with another tax cut bill.

Democratic Reps. Ryan Winkler and Jason Metsa of Virginia were the sole dissenters in the vote. Winkler explained that the overall package was too big and would take away from other priorities.

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