Tax Bill. Will There or Won’t There Be?

Last week, we contacted House Tax Committee Chairman Greg Davids (R-28B, Preston) and reached him as he was on the road headed to his endorsing convention. When we explained the reason for the call and our desire to learn more about the Republican Majority’s Tax position HF0848, to which he commented, “You mean the “Don’t Stop Believin’ tax bill.” We asked which groups would be provided tax expenditures in their bill, as he responded, “This is a middleclass tax bill, which provides relief for seniors on Social Security, tax relief for retired military veterans, relief for property tax payers and relief for students experiencing student loan debt.”

During our discussion and as he articulated the information we were able better understand the House’s position on the Tax Bill. We asked him if they had repriced their bill will all of the new additions and he said, “Yes, we have the numbers, we have repriced the our Tax Bill, and I have the gavel, but we need to have a budget target before I can call a conference committee.” Based on the analysis of the bill to date there are $2 billion in tax relief currently contained in the bill.

We asked him how long he thought it would take to receive the budget target, and his reply was, “I expect it will be a week or 10 ten days, but I am not sure.” (Now, it would be tomorrow or early next week) We then asked what he expected to ultimately occur. His response, “I will be given a target of I believe, $400-500 million and then Sen. Skoe (Senate Tax Committee Chair Sen. Rod Skoe (DFL-02, Clearbrook) and I will get together and over the course of three hours and lunch we can hammer out a bill.”

We then asked what other parts of the budget the balance of the $898 was expected to be applied to and he said, “Transportation and the Bonding Bill.” He discussed how portions of the Tax Bill will redirect monies from the sales of auto parts, rental vehicles and car leases, which was what the Republicans proposed last legislative session. Governor Mark Dayton (D-MN) has called for a stable funding source for transportation and transit and has called for a gas tax increase to provide the stability, which has been a non-starter for Republicans.

As the House pairs down its $2 billion Tax bill there are also other considerations which will affect the budget based on implementation. The first will be the year of enactment and whether it will be the first or the second year of the biennium also whether or not there is a phasing in of the legislation i.e. ramping up from the enactment date on.

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