Senate passes tax cuts, sets stage for talks with House

Published 9:28 am Tuesday, May 5, 2015

ST. PAUL — The Minnesota Senate on Monday passed a tax cut plan that is a fraction of the size of the relief bill that earlier cleared the House, setting the stage for difficult negotiations over a compromise that are expected to go right up to the mandatory May 18 adjournment.

Opting for modest changes to property tax rates and relief programs, majority Democrats driving the Senate proposal said they were being careful with tax cuts despite Minnesota’s improved economic situation and a $1.8 billion budget surplus. It’s a contrast to an aggressive House GOP plan, which contains $2 billion-plus in short-term tax cuts that would grow in future years.

The Senate plan, which includes about $240 million for potential tax cuts, passed 42-25 with three Republicans on board.

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Democratic Sen. Rod Skoe, the Taxes Committee chairman, said his goal is to put a dent in property taxes for homeowners, farmers and businesses. The exception is railroad companies, which would pay a higher property tax under the premise that local governments need help paying for major safety upgrades along routes. But the companies have threatened to sue if that becomes law.

Republicans opposed to the bill said the railroad clause was a factor. But more broadly, they said Minnesota lawmakers should be coming up with bigger tax cuts two years after they raised taxes to fill a budget hole.

Sen. Julianne Ortman, R-Chanhassen, channeled the memorable 1980s ads from a burger chain asking “Where’s the beef?” in sizing up the Senate proposal. “The question I have is ‘Where’s the relief?’” Ortman asked fellow senators, calling the bill a missed opportunity.