Gov. Mark Dayton expected to veto GOP tax-cut bill

[The Baconator]

[Quote]. The Republican-controlled Minnesota Legislature has sent its tax-cutting formula for creating jobs to Democratic Gov. Mark Dayton for his all-but-certain veto.

The GOP bill would cut taxes by nearly $200 million over the next three years and, in the words of Senate Taxes Committee Chair Julianne Ortman, R-Chanhassen, spark an “immediate surge of economic activity” that would generate more jobs than the Minnesota Vikings stadium bill or a public works bonding bill.

The Senate passed the bill Thursday, May 3, on a 41-25 vote, largely along party lines. The House approved it 73-57 Monday with two Democratic-Farmer-Labor votes.

Dayton has said he opposes it because it would create bigger budget shortfalls in the future. The state is facing a projected $1.1 billion deficit in the next two-year budget cycle, and the tax bill would add $145 million more in red ink, which he called “fiscally irresponsible.”

Rep. Jeanne Poppe and Sen. Dan Sparks, both DFL-Austin, mirrored Dayton’s concern. Each had voted against the bill as it was going through Legislature.

“We need to figure out the right balance,” Poppe said. “This certainly isn’t it.”

Sparks said it was important not to go into deficit spending again.

“If you start looking at the ongoing costs that would be associated, they would be pretty large going forward,” he said.

Rep. Rich Murray, R-Albert Lea, disagreed. He said it was important Dayton sign the bill so that Austin’s local government aid doesn’t take another hit in the coming fiscal year.

“The governor needs to take a good hard look at this and see how to make this work,” Murray said. Dayton was nearly on board with the bill a week ago, and the bill has toned down since then, Murray said. He added he was in contact with mayors and councilmen from around the Austin/Albert Lea area to spread this message.

—McClatchy-Tribune Information Services contributed to this report.

Dayton had proposed spending $50 million next year on temporary, one-time tax breaks, but Ortman asserted businesses need permanent tax relief before they make long-term investments.

The most controversial break and most expensive in the long run would freeze the state-levied property tax on businesses at its current level, $817 million.

That would save owners of commercial, industrial and seasonal recreational property $10 million next year, but that number would balloon to $72 million in the following two years. Senate Minority Leader Tom Bakk,

DFL-Cook, said it would take $2.7 billion out of the state treasury over 14 years — the same amount the state has borrowed from public schools to balance the budget.

“It’s putting corporate tax cuts ahead in line before repaying the schools,” Bakk said.

DFLers also argued that businesses would not have to create jobs to get the property tax breaks, and most of the savings would go to Home Depot, McDonald’s and other big national corporations that own stores in Minnesota but are headquartered elsewhere.

But House Taxes Committee Chairman Greg Davids, R-Preston, had said automatic inflationary increases in the state property tax are hurting businesses, particularly those struggling in a tough economy. Their property taxes go up even when they lose money.

Originally, Republicans wanted to phase out the state levy over 12 years. Davids said the freeze was a more modest break that Dayton should be able to accept.

The biggest immediate tax break in the bill is a sales tax exemption at the time of purchase to small businesses that buy capital equipment, instead of the current system that requires them to pay the tax and apply for a refund later. That provision would apply to companies that employ 80 or fewer employees and save them an estimated $19 million in the fiscal year starting July 1.

The measure would provide an additional $8 million next year for business research-and-development credits and $4.5 million more for “angel tax credits” to promote investment in startup companies.

Homeowners whose property taxes shot up by at least 12 percent and $100 would get state refunds from a new $4 million fund.

Unemployed veterans would get a boost. The bill offers a $3,000 tax credit for each jobless vet an employer hires.

Davids said the biggest job-creating provision in the bill is one for a tax increment financing district for the proposed expansion of the Mall of America in Bloomington.

The mall’s district would use property taxes generated by the expansion to help cover development costs. Davids said it would create more than 10,000 construction and permanent jobs. [/quote]

[url]http://www.austindailyherald.com/2012/05/04/gov-mark-dayton-expected-to-veto-gop-tax-cut-bill/[/url]

[Kube]

I'm surprised facepunchers haven't begun to try and point out flaws in this bill yet. :v:

[Gatsby]

[QUOTE=LtKyle2;35824988]I'm surprised facepunchers haven't begun to try and point out flaws in this bill yet. :v:[/QUOTE]

We've just given up since every bill that's spewed out of Congress is controversial and/or completely stupid.

[Missing User]

[QUOTE=LtKyle2;35824988]I'm surprised facepunchers haven't begun to try and point out flaws in this bill yet. :v:[/QUOTE]

Well, here, in Minnesota, the state owes school districts a shit ton of money that of which they cannot pay. Our politics here are so fucked up.