Republican minority leaders in the Minnesota Legislature implemented a $13 billion “Give It Back” plan Tuesday to tap most of the state’s $17.5 billion budget surplus for one-time and permanent tax cuts, including rebate checks and completely eliminate taxes on Social Security. .
The GOP plan would use one-time money for rebate checks of $1,250 for individuals and $2,500 for filers, plus tax credits of $1,800 per child for the next two years. As permanent relief, it would end partial state taxation of Social Security income, cut income tax rates and raise exclusions for property taxes.
Republicans announced their plan a day after state budget officials released an updated forecast showing the surplus remains stable, with higher-than-expected revenues neatly offset by a new law requiring inflation to be factored into expenditure projections.
MINNESOTA GOV. WALZ PROPOSES TAX CREDITS FOR 2.5 MILLION FAMILIES
Senate Minority Leader Mark Johnson, of East Grand Forks, said at a news conference that the surplus presents a historic opportunity to return the money to taxpayers.
“With over $17.5 billion, if we don’t give Minnesotans tax relief now, when will we?” asked House Minority Leader Lisa Demuth, of Cold Spring.
Republicans want deeper cuts than proposed by Democratic Gov. Tim Walz and Democratic legislative leaders and would return more of the surplus to taxpayers instead of spending it on education and other programs as many Democrats want .
Even though Republicans don’t have the votes to pass their plan as is, they still have leverage they could use to try to get some of the things they want. That’s because lawmakers on both sides want to pass a public infrastructure borrowing package known as a bond bill. But raising the state’s debt burden to 60% requires supermajorities in both the House and the Senate. And some GOP Republican votes would be needed in each chamber.
Johnson said Senate Republicans want a bonding bill, but they also need guarantees of tax relief before committing to the details of that package. Demuth said bonding and tax relief are part of the same conversation. Neither leader, however, would get specific about potential trade-offs.
The GOP tax plan, which would cost $13 billion over two years compared to the $5.4 billion Walz proposed last month, has similarities that could be starting points for negotiations.
Walz called for rebate checks of $2,000 for families with incomes under $150,000, and $1,000 for individual filers making less than $75,000. Parents could get an extra $200 for each dependent – up to three. Those who make more than the income caps will get nothing, it would reduce Social Security taxes for more than 350,000 families so that 43% of families who receive it would save an average of $278. And he called for up to $10,500 in increased tax credits for families with children.
MINNESOTA GOV. WALZ SIGNS 1ST TAX RELIEF BILL OF LEGISLATIVE SESSION
The governor said Monday that his proposal would represent “the largest tax cut in Minnesota history.” As for the GOP’s “Bring It Back” slogan, he said, “Join the crowd.” But he said it makes “no sense” to end Social Security taxes for the wealthy.
Minnesota is one of 11 states that tax Social Security to varying degrees. Demuth noted that even some Democrats campaigned last year in favor of a full repeal. GOP Rep. Kristin Robbins, of Maple Grove, said their proposal would give 472,000 Minnesotans an average of $1,277.
As for the permanent tax cuts, the complete elimination of Social Security income taxes would cost about $1.26 billion per future two-year budget period, said GOP Sen. Bill Weber, of Luverne, and 1% income tax rate reductions for both bottom. Brackets would cost about $3 billion. The property tax breaks – excluding raising the value of state properties – would cost about $70 million every two years.
CLICK HERE TO GET THE FOX NEWS App
As a one-time relief, the rebate checks would cost about $5 billion, Weber said, and the child tax credits would cost about $4 million.