The past couple of weeks at the House have been particularly busy. The House passed legislation to further reform our private insurance market, the House Republican caucus announced our budget proposal, and we passed our House tax relief bill.
Our reinsurance bill, HF5, would reduce premium costs by 17-18 percent for people on the individual market by having the state mitigate the impact of patients that insurance companies deem “high-risk.” This will also make it easier for individuals with serious health conditions to get coverage. HF5 is a follow up on the premium relief and initial reforms the Republican caucus passed earlier this year. There is still more work to be done in improving our insurance market, but this is a solid second step. This bill was sent to conference committee with the Senate, and received its final passage in the House.
House Republican budget proposal
As I mentioned before, our caucus introduced our budget targets for the next biennium. The highlights of our proposal include $1.35 billion in tax relief, $450 million in new funding for transportation infrastructure, and an overall budget target that is fiscally responsible and sustainable for the coming two years.
This budget addresses the concerns we have heard over and over again from middle class Minnesotans, while also respecting taxpayers. More detailed information regarding the specific provisions in each finance committee bill will become available once these bills come to the floor for debate.
House tax bill
Our House tax relief bill passed the House on a bipartisan vote. This proposal contains the $1.35 billion in tax relief mentioned above, which is largely focused on helping alleviate the burden on middle class Minnesotans.
I’m particularly pleased that a provision similar to one I introduced in the House was included that would make Social Security income tax exempt for senior couples with up to $72,000 in income and individuals with up to $56,000 in income by 2019. Our seniors often rely on fixed incomes; this is exactly the sort of tax relief we should be providing.
There is also $100,000 of economic development funding for Taylors Falls included in our tax proposal. As a border community, Taylors Falls competes directly with Wisconsin to attract and retain business.
Additional provisions in the tax bill are as follows:
• More than $125 million to address college affordability through a first-in-the-nation tax credit for students making loan payments, and provisions for families saving for college using 529 Savings Plans. Through the student debt tax credit, 77,500 students will receive on average a $640 reduction in their taxes.
• $42 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service. Farms will also benefit from a measure conforming the state death tax to the federal exclusion.
• $35 million for families with young children by modifying the child and dependent care credit. A family of four earning $50,000 a year will receive an additional $1,200 toward their childcare expenses.
• $203 million in relief for hometown businesses by exempting the first $200,000 in property value from the extra tax on businesses and freezing its automatic inflator. This helps every business owner reinvest in their business, protecting 30,000 Minnesota jobs.
• $100 million in direct property tax relief for homeowners and renters.