Minnesota lawmakers remain at odds over tax policy, surplus spending

If you thought state lawmakers would be able to find easy solutions to the relatively pleasant problem of having a $9.25 billion budget surplus, think again. The House, Senate, and governor all have plans for most of the money, but they have very different ideas.

The Republican plan focuses on income tax cuts by reducing the lowest tax bracket so anyone who pays income taxes will see a reduction. Republicans also want to eliminate all income taxes on Social Security recipients.

“The bill you have before you is good tax policy,” Republican Tax Committee Chair Carla Nelson of Rochester said at a committee hearing early Wednesday.

House Democrats propose child tax credits to help low- and middle-income families. They also proposed a variety of spending proposals, including paid family and medical leave. They do not propose eliminating Social Security taxes except for those with income under $75,000.

“Our focus really was how can we make a difference in people’s lives,” DFL House Tax Committee Chair Paul Marquardt of Dilworth said this week.

Gov. Tim Walz proposes direct payments to Minnesotans to account for more than $2 billion of the surplus. His plan would give single taxpayers a $500 payment and married tax filers $1,000.

The three sides have until May 23 to work out a compromise.