State Senator Julianne Ortman has laid down the law:
Let me be very clear: Before we even consider a vote on a Stadium to benefit one business enterprise, we must secure permanent tax relief for ALL Minnesota businesses and property tax payers.
So what’s in Ortman’s tax bill that is so critical?
$299 million in tax cuts that largely go to the wealthy and corporations over the next three years ($104 million in 2012, and the rest over 2013-14). The major provision is a phasing out of the state property tax on commercial and seasonal recreational property — a total of $173 million.
The 2012 cuts are paid in the Senate bill for by transferring $104 million out of reserves (on top of the $416 million that the Senate has already offered to transfer out of reserves to pay back part of the K-12 school shift). There is no payback plan specified for the next budget cycle, so the $195 million will be added on to the existing $1.1 billion deficit. The House version of these tax cuts finances them on the backs of renters, by slashing the tax credit low- to middle-class renters receive every year.
To summarize: in order to give tax cuts to wealthy Minnesotans and corporations, legislative Republicans are either going to drain reserves this year and add to the deficit in the next budgeting cycle OR raise taxes on working families. That doesn’t sound like a good deal to me.
And only if they’re allowed to accomplish that — and if they get Governor Dayton to cave to their demands for an obscenely small bonding bill — will they move on and give the stadium bill a vote on the floor of both the House and Senate. There’s one word that describes the performance of the Republican majorities this session: failure. It’s time for some new voices in St. Paul.
[UPDATE]: The conference committee report detailing the final bill agreed to by members of the House and Senate Tax Committees was released last night. The revised bill is less bad than the original bills that passed both houses. The total tax cut over the next three years has been reduced to $189 million, $48 million in 2012 and the remaining $141 million in the next biennium. Instead of phasing out property taxes paid by businesses and cabin owners, the bill instead freezes the amount of taxes paid from these classes of property (today, the total take is indexed to the rate of inflation). The cost of this proposal is $82 million over the next three years.
However, the revised bill still does not include any long-term financing mechanism. The $48 million cost for 2012 will be financed from budget reserves and a Revenue Department fund transfer, while the $141 million in the next biennium will be tacked onto the existing $1.1 billion deficit.