Vote on Republican House tax bill could happen this week in committee

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by T.W. Budig
ECM Capitol reporter

House Tax Committee Chairman Greg Davids considers his tax bill — the “Davids’ Jobs’ Bill” he styled it — the potential jobs’ bill of the legislative session.

But Rep. Melissa Hortman, DFL-Brooklyn Park, wonders whether the bill is actually a fake.

The House tax committee this week will be wrestling with the bill, Davids indicating on Monday (March 13) he has the votes to pass the

bill out of committee.

That could happen Thursday or Friday, he indicated.

“Don’t count Governor (Mark) Dayton out,” said Davids of crafting a compromise with the Democratic governor.

“We’re certainly open to looking at various funding mechanisms,” he said.

Contained in the tax bill is one of the Republican marque initiatives of the session, a 12-year phase out of the commercial/industrial statewide business property tax.

Other proposals in the bill, including changes in the research and development tax credit and angel investment tax credit, creates a revenue loss of about $70 million in the state’s current spending cycle.

But Davids in his bill looks to reducing the renter property tax refund to cover the loss.

“It’s a renters’ credit on steroids,” said Davids, arguing the refund is in excess of the actual impact of property taxes on rent.

Davids proposes a split renters’ credit schedule, one for senior/disabled and the other  for non senior/non disable.

The senior/disabled income eligibility would decrease to $40,000 from $53,539.

The legislation eliminates an inflation adjustment factor in the renter refund schedule.

Debate on the bill in committee on Monday was brisk.

“Katie, bar the door!”  shot Rep. Pat Garofalo, R-Farmington, of the perceived assault on the middle class of a Democratic-controlled Legislature and Dayton as governor.

“That’s why we’re (Republicans) in charge of the place and you’re not,” Garofalo said of the perceived public support for Republican tax policy.

Other Republicans chimed in.

“I kind of feel some members of the committee are living in the 1970s,” said Rep. Sarah Anderson, R-Plymouth.

But these exchanges were met with heat by Rep. Tom Rukavina, DFL-Virginia.

In questioning business representatives, Rukavina explained the business community continually appeared before the tax committee requesting lighter tax burdens.

Who in the hell is going to pay to property taxes to fund the schools? he asked.

Additionally, in questioning National Federation of Independent Business-Minnesota lobbyist Mike Hickey, Rukavina asked why the

federation was supporting the tax bill when the renter credit reduction would translate into a bigger loss to small business than any property tax relief the bill offered.

But Hickey indicated the bill contained a number of things the federation found desirable.

Other business representatives expressed support;.

Minnesota Chamber of Commerce Tom Hesse indicate that the statewide property tax was the most direct way to provide to tax relief.

“So we’re thankful for that,” he said.

But some Democrats on the committee asked whether anyone truly believed the governor could support a business tax cut paid for with revenue taken from the renter credit.

Indeed, Hortman questioned whether it was already too late for the committee to find common ground.

This led her to question whether Davids’ bill was actually a fake.

But Davids dismissed the idea.

Speaking after committee, Davids credited Dayton’s focus on job creation, saying Republicans and the governor had simply taken different paths to achieving it.

“I think his jobs’ bill is a jobs’ bill that doesn’t create jobs,” said Davids of the governor’s proposed business tax credit for hiring veterans or new entrants into the workforce.

Davids argued the Republican approach would better incite businesses to hire.

“It’s a jobs’ bill,” said Davids of his legislation.

“If it passes and the governor signs this into law, this is the Jobs’ Bill of this session,” Davids said.