Beginning next year, more than 156,000 new tax filers would become eligible for the Minnesota Renter’s Credit under a bill passed by the Minnesota House of Representatives Property Tax Division.
The House voted 10-3 in favor of the bill, HF 4064, which moved the credit to the income tax forms and streamlined income calculation, according to a House news release. The bill also revamps the Local Government Aid formula and increases local government aid by $68.4 million and county program aid by $26 million in the 2024-2025 biennium, the release said. The bill appropriates $22 million annually from the General Fund to the Soil and Water Conservation District Aid and raises the School Building Bond Agriculture Credit to 85%.
“As a package of tax cuts designed to lower the burden of government on hard pressed Minnesotans, this measure is to be welcomed,” Center of the American Experiment Economist John Phelan told The Center Square in an emailed statement Friday. “We now need the state government to follow suit with permanent income tax rate cuts.”
The bill is one of the largest investments in property tax cuts and renter’s credit in decades, House Property Tax Division Chair Rep. Cheryl Youakim, DFL-Hopkins, said in a statement.
“The bill will put money back into Minnesotans’ pockets at a time when they need it the most,” she said.
Rep. Jerry Hertaus, R-Greenfield, said in the meeting Wednesday that he’s disappointed in the bill because he believes the Property Tax Division report should have provided more evenly distributed relief, general levy reform, business tax relief and a change in the Office of Grants Administration formula.
“This bill is going nowhere with regard to the Senate, and I don’t suspect that our tax proposal is going anywhere, but I will make the commitment to my friends on the other side to work with my colleagues in the Senate in the majority to see if we can get a text,” he said.
Youakim said following Hertaus’ comments that the division seeks to create equity in the property tax system and the bill aids that goal by proposing investing in property tax refunds, updating the Homestead Exclusion to current housing values, adjusting the targeted property tax credit and making the senior deferral program is more accessible. She said that in 20 counties, 50% of people who receive the renter’s credit are seniors or people with disabilities. The bill also increases school levy equalization for counties with lower property taxes and allows cities tax increment financing flexibility.
Rep. Steve Green, R-Fosston, and Rep. Erik Mortensen, R-Shakopee, joined Hertaus in voting against the bill.
This article was originally posted on House passes Minnesota Renter’s Credit, but future in Senate remains in doubt