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Senate moves tax cuts move forward after a day delay

ST. PAUL -- Senators took a day to read a 62-page bill that would cut taxes $432 million, then passed it this afternoon.

After senators approved the bill 58-5, the House planned to take it up later today. That would provide time for Revenue Department workers to make changes so Minnesotans filing income tax returns before the April 15 deadline will not have to amend their returns.

The action came a day after Republican senators delayed debate on the bill, saying they only received the bill an hour before debate was to begin.

Even before the Thursday delay, senators waited two weeks after the House passed its tax bill.

“We took a little bit of time to look at the ramifications so we could make some improvements,” Senate Tax Chairman Rod Skoe, D-Clearbrook, said. “And we did.”

Skoe said one of the major improvements senators made was to increase the Working Family Credit that helps low-income Minnesotans.

The Senate vote came after three-and-a-half hours of debate. Two conservative Republicans and three liberal Democrats opposed it.

Sen. Patricia Torres Ray, D-Minneapolis, said she voted against the bill because she favors more education spending instead of the tax cuts.

More cuts may be coming. "We are not done yet," Skoe said, adding that he expects a second tax bill.

Skoe argued against deeper tax cuts now, and putting more in the state budget reserve, because the last time the state was in good financial condition then-Gov. Jesse Ventura led the charge to send tax rebate checks to Minnesotans. Soon after that, Skoe said, the state began running into financial problems.

A rush was on to pass the tax bill as soon as possible as the income tax deadline nears.

Revenue Commissioner Myron Frans said that "every day counts" as taxpayers increasingly are filing tax returns.

Frans said that his staff will work through the weekend to update documents to take into account changes in the bill that affect returns now being filed. The Revenue Department also will work with tax preparers and tax software companies to help them make needed changes.

Later today, Frans was expected to give taxpayers guidance about whether they should go ahead and file tax returns or wait until the changes can be implemented. Senate Majority Leader Tom Bakk, D-Cook, said on Thursday that some should wait until next week to file.

The tax bill rewrites some state tax laws to conform to federal law, which would lower thousands of Minnesotans’ income taxes. It also would overturn business sales taxes approved last year, including those placed on farm equipment and other commercial repair work and on some on technology sales, as well as a warehousing tax that was to take effect April 1.

During Friday tax debate, several GOP senators offered amendments to take money from a planned $150 million budget reserve increase to support other tax breaks. All failed.

GOP senators unsuccessfully tried to kill a planned $63 million Senate office building.

Republicans frequently reminded Democrats that they increased taxes more than $2 billion last year, but only want to cut taxes $432 million this year.

"It is not often that we get a second chance to recover once we have jumped off the ledge," Sen. Paul Gazelka, R-Brainerd, said, adding that many mistakes were made last year when business taxes were increased.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.