Column: Budget proposal eyes tax relief
A common theme between the 2016 campaign and the 2017 legislative session is health insurance affordability. While Washington D.C. has had difficulty trying to enact reforms to our health insurance system, St. Paul has experienced some success. The Minnesota Premium Security Plan, which passed both the House and the Senate and has become law, is aimed at stabilizing premiums by lessening the impact of high-risk individuals on the individual health insurance market. The program will be administered by the Minnesota Comprehensive Health Association, which previously managed our state's high-risk pool and ensured the sickest Minnesotans had access to health care coverage. Minnesota Management and Budget has estimated that this plan could help reduce health insurance premiums 17-18 percent, or more. While the Legislature's work to improve the health insurance market has made strides in enacting several reforms, our work is not done. I am particularly concerned about the disparity in health insurance costs that Goodhue and Wabasha counties face compared to other areas of the state. I will continue to make health care a top priority at the Capitol.
The House of Representatives had ambitious goals for the 2017 session; one of those being having all budget bills passed off the House floor before Easter and thus be ready for final negotiations with Gov. Mark Dayton. As we are approaching Easter Sunday, I can confirm that we have successfully accomplished that goal.
One of those budget bills is a $1.35 billion tax relief proposal that has a heavy focus on helping our seniors, students and local agriculture economy. Under the House tax bill, Minnesota seniors would receive $269 million in tax relief by increasing the income limit at which Social Security income is taxable. Currently, married seniors making more than $32,000 annually or single seniors making more than $25,000 annually must pay taxes on their Social Security income. The bill that passed the House would increase that threshold to $61,000 for a married couple and $46,500 for a single filer in tax year 2018, and $72,000 for a married couple and $56,000 for a single filer in tax year 2019. By 2019, nearly 284,000 senior citizens would be eligible to receive a tax exemption on their Social Security benefits with an average reduction of $710. Throughout the campaign, I talked with many seniors who worry about affording their basic life needs. I believe that our seniors who have worked, raised families and paid taxes here deserve this break.
The House tax bill also provides tax relief for students and their families by including more than $125 million to address the growing costs of higher education through a first-in-the-nation tax credit for student loan payments. With this bill, 77,500 students will receive an average tax deduction of $640. There is also a provision that would allow families who are saving for future postsecondary expenses using 529 Savings Plans to receive a credit or a deduction on the money they invest into the plan. As the cost of higher education continues to rise, it is essential that Minnesota students and families see some financial reprieve.
Additionally, farmers and landowners would see a reduction in their tax burden relating to school bond referendums. An estimated 240,000 farmers would receive property tax relief to reduce their disproportionate share of school district debt service. When a school bond referendum is enacted, farmers pay a majority of the costs, because these referendums are based on property taxes. This tax structure penalizes our local agriculture industry and economy.
Thank you for allowing me to serve you in St. Paul. If you ever have any questions, comments or concerns regarding anything related to state government, please do not hesitate to contact me at firstname.lastname@example.org or 651-296-8635.
I wish you all a blessed and safe Easter/Passover holiday weekend. I hope you have the chance to spend time with your family and friends.
Rep. Barb Haley