A weekly message from your Senator

Dear Constituents and Friends,

I’m glad to report that our first SD49 Day at the Capitol was a tremendous success. We had dozens of students representing robotics programs in the district demonstrating their robots in the Capitol Rotunda. We also held a “mini” town hall meeting and had a very engaged discussion with constituents in attendance. Topics covered included health care, education, transportation, and taxes, among others. We also held tours of the newly renovated Capitol. Thank you for all of those who attended!

The Sunday liquor sales debate dominated the headlines this week. The House passed the bill with a wide margin on Monday, followed by the Senate Commerce Committee passing the bill to the Senate floor. Several Senators held a Twitter Town Hall following the committee hearing on Wednesday to add more voices to the conversation. The vast majority of the discussion was positive, with constituents from across the state asking when the bill would be voted on, and when it could potentially go into effect. I am leaning in support of this bill, but I always welcome your thoughts, comments and concerns.

Sincerely,

Sen. Melisa Franzen

Senate and House elect four to fill U of M regent positions

The House and Senate elected two new faces to the University of Minnesota Board of Regents and approved full six-year terms for two incumbents. The House and Senate met in joint session on Wednesday night.

Positions in Congressional Districts Two, Three and Eight, and one At-Large were open. Thirty-five people applied last fall and the Regents Candidate Advisory Council (RCAC) approved 17 candidates for potential election. The House and Senate Higher Education Committees met and approved a slate of four candidates in early February.

The following candidates were elected by the House and Senate:

CD 2: Steve Sviggum

CD 3 Darrin Rosha (incumbent)

CD 8: David McMillan (Incumbent)

At-Large: Ken Powell

Senate Commerce Committee approves Sunday alcohol sales

This week, the Senate Commerce Committee approved a bill that would allow for Sunday liquor sales in Minnesota. The bill allows for the sale of liquor on Sundays between the hours of 11 a.m. and 6 p.m. It also prohibits the wholesale delivery of alcohol to off-sale licensees on Sundays.

Minnesota is currently one of 12 states that prohibits the sale of liquor on Sundays. Supporters of Sunday sales argue that the law is outdated and limits the ability of Minnesota businesses to compete with neighboring states on the sale of Sunday spirits. Sixty % of Minnesotans live within 30 miles of the border, and supporters of the bill are concerned with Minnesota tax dollars going to neighboring states.

Opponents of the bill argue that family-owned and municipal liquor stores will not necessarily generate any more profits by staying open on Sundays. Rather, small stores will have to compensate for the increase in operating costs by raising prices and further tilting the marketplace in favor of big-box retailers. Opponents also say allowing Sunday liquor sales will result in more alcohol-related accidents, more substance abuse throughout the state, and will negatively affect the finances of municipal liquor stores in rural area that depend on funds from these stores.

Legislators have attempted to remove the ban on Sunday liquor sales over the course of the last several sessions. This year is the first year that the Legislature has heard the issue as a stand-alone bill rather than an amendment on the Senate floor. The bill was approved by the House Monday with a bi-partisan vote of 85-45. Governor Dayton has said that if the bill passes both chambers he will sign it into law. (SF 1086)

Lawmakers discuss Social Security benefits and taxes

The Senate Tax Committee heard six bills this week aimed at reducing taxes owed on Social Security benefits. This has been a recurring topic during the past few years, but one main point often is overlooked: about 68% of Social Security benefits received in Minnesota already are tax-exempt. Minnesota follows the federal government’s treatment of these benefits, which means a minimum of 15% of all taxpayers’ benefits are already exempt from taxation. Nearly half of households pay no taxes at all on their benefits – an exemption that already costs the state about $489 million every two years, according to the Tax Expenditure Budget.

However, 28 states fully exempt all Social Security earnings and nine states do not have an income tax at all. Five of the bills heard this week would add Minnesota to the list of states that fully exempt Social Security benefits from state taxes. Some of those bills phase in the reduction over several years, but all would cost more than $1 billion each budget cycle once fully implemented.

Permanently spending $1 billion on a full exemption could benefit about 394,000 Social Security recipients but would provide no tax relief to the thousands of Minnesota households already exempt from paying taxes on their benefits. In addition, almost 50% of the benefits would go to seniors with incomes over $100,000. Committee testimony from the North Star Policy Institute pointed out that 61.6% of Social Security recipients in Greater Minnesota would see no benefit from a full exemption, and 58.1% of recipients in the metropolitan area would be unaffected.

A sixth bill heard this week would provide a new Social Security income tax subtraction more directly targeted at middle-income seniors. All beneficiaries would be able to deduct a portion of their taxable benefits from their income taxes: up to $1,600 for married-joint filers, $1,250 for single filers, and $800 for married-separate filers, adjusted annually for inflation. This approach would provide an equal benefit to all Social Security recipients but concentrate the impact more among lower-income seniors who need tax relief the most; the net effect of a $1,600 subtraction would be far greater for those earning $50,000 as opposed to those with higher overall incomes.

Providing tax relief and support for the state’s senior citizens is a bipartisan priority this year. As a co-author of one of these bills, I will work to compromise on fiscally responsible solutions that provide targeted tax relief to the senior citizens who need it, without toppling the state’s budget stability or depleting resources for tax relief for other segments of Minnesota’s population.

Committee considers expanding Working Family Tax Credit

The Working Family Credit, Minnesota’s version of the federal Earned Income Tax Credit, is a proven tool to directly improve the financial health of working, lower-income families. A bipartisan bill to increase and expand Minnesota’s Working Family Credit was considered by the Senate Tax Committee this week.

The proposal would bring an estimated average tax reduction of $124 to about 372,000 tax filers in 2017 by expanding income levels and percentages at which the credit begins to phase out. The bill also would expand the credit to an additional 107,000 Minnesotans, including those ages 21-24 who previously were ineligible.

The tax credit is widely used in every corner of the state: 48% of the recipients live in Greater Minnesota. About one out of every six tax-filing households in Greater Minnesota received the credit. The proposal to increase the important tax benefit was also included in last year’s vetoed tax bill and is included in the Governor’s budget again this year.

The bill was heard in the Tax Committee and laid over for possible inclusion in the omnibus tax bill. (SF 28)

Tax committee focuses on health and wellness

The Tax Committee took a health care focus this week, considering two bipartisan bills aimed at supporting Minnesota’s health care workforce and promoting more employer involvement in their employees’ health. The first bill would create a temporary, $5,000 tax credit pilot program for health care professionals willing to serve as unpaid preceptors to medical residents still in training. The idea stems from the Legislative Healthcare Workforce Commission, which heard stories of students’ graduation dates being delayed by up to a year because of the lack of preceptors, which are a necessary part of medical students’ degree requirements. In other cases, medical students are paying preceptors out of their own pockets to act in a mentorship role. The tax credits would be one tool to support the growing industry and address health care workforce shortages across the state.

The committee also considered a bill to exempt employee-provided fitness benefits from taxes. Employees must currently report employer-paid benefits for utilizing fitness facilities as wages and pay taxes on that sum. The bill discussed this week would provide up to a $30 tax credit per year to offset the tax impact of what the bill sponsors say is a necessary, important benefit that should be encouraged among more employers. Both bills were laid over for possible inclusion in the committee’s omnibus bill (SF 139, SF 687).