Tuesday, April 21, 2015

House Bill Clears Tax Committee.  With the House embroiled in the transportation funding debate today, there hasn't been a whole lot of action on education-related issues.  HF 844 cleared the House Tax Committee yesterday.  There was some concern expressed over the property tax increases to the Minneapolis, St. Paul, and Duluth school districts that result from a cut in aid for integration revenue and alternative facilities revenue.  Because revenue levels remain the same, this requires a shift from aid to levy in these districts and the increase is considerable.  HF 848--the House tax bill that cuts taxes by over $2 billion--was also heard on Monday.  HF 848 contains a number of education-related tax changes and a number of education interests testified.  Rather than provide oral testimony, I supplied the committee with a list of comments that encapsulated earlier testimony I had given on a number of provisions when they were before the Education Funding Division.  Here are a list of the education-related provisions in the tax bill:

  • The education tax credit is expanded to include private school tuition and tuition to early childhood programs.  The income eligibility ceiling for the credit is increased and indexed to inflation.
  • An income tax credit of up to $2,500 is provided to a teacher who achieves a master's degree in their area of licensure.  Credit could be claimed in the year in which the candidate achieves their degree and could only be claimed once.
  • Limits capital levy elections to November of each year.  Only operation levies held in districts in statutory operating debt could be held in a month other than November.
  • Operating referendum question language would have to contain a amounts levied by board through the local option levy and the $300/PU board-approved referendum.
  • Provides credit of 50% of taxes paid on agricultural property for debt service.
The statewide property tax is phased out over six years, with the first $500,000 of value of a commercial/industrial parcel and first $250,000 of a seasonal/recreational parcel exempt from the the statewide while the phase-out is in effect.  The student achievement levy of $20 million was repealed in the House E-12 funding bill.

HF 844 (back to the E-12 funding bill) will be in the House Ways and Means Committee tomorrow.  There will likely be very little testimony with discussion centering around the size of the budget target and little else.  It is unclear when the Senate bill will be heard in Senate Finance and the Senate Tax Committee.

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