Legislators have agreement on $259 million tax bill

Legislative leaders reached a deal Friday on a basket of tax cuts worth $259 million that will benefit a wide swath of Minnesotans, including outstate residents, working parents, veterans, farmers and even student loan debtors, who stand to get a first-of-its-kind break.

The bill also provides tax deductions and credits for families contributing to 529 savings plans, property tax relief for farmers and tax breaks for a professional soccer stadium planned for St. Paul.

The plan, which will cost about $544 million in future two-year budget cycles, represents the first big break in what has been a stalemate over transportation funding and other budget priorities at the State Capitol.

"House Republicans are proud to announce we have worked with the Senate DFL to provide more than half a billion in ongoing tax relief for middle-class Minnesotans," said House Speaker Kurt Daudt, R-Crown. "While the state has a budget surplus, Minnesota families are not seeing a surplus in their own budgets. For hardworking Minnesotans, relief is on the way."

Gov. Mark Dayton said the tax agreement seemed to be "in the ballpark of fiscal responsibility," a nod to his aim of keeping a tax-cut package small to avoid future budget deficits.

Dayton stressed that he would only sign it as part of a broader package that includes supplemental spending for key programs on pre-K, broadband and racial equity.

He said that while he presented his list of must-haves to legislators, he had not received a final offer on a supplemental spending bill that would divvy up the rest of the state's $900 million surplus.

The tax agreement reached Friday is expected to help outstate residents pay for school bonds, after farmers and other large landowners complained for years about the burden they carry to finance local services. Now the state will subsidize 40 percent of those bonds for outstate communities

Minnesotans with student loans will see a tax credit of up to $1,000. Senate sponsors of the measure lauded its passage, noting the legislation did not receive a hearing in the GOP-controlled House.

"We are thrilled this landmark provision is part of the final, agreed upon tax bill," said a joint statement by DFL state Sens. Greg Clausen of Apple Valley, Vicki Jensen of Owatonna, Kevin Dahle of Northfield and John Hoffman of Champlin.

The deal also cuts the statewide property tax on commercial and industrial properties by exempting the first $100,000 of property value — a win for small-business property owners, as well as outstate interests where property values are typically lower than in the metro area.

The tax cut provisions for outstate residents underscore the importance of battleground districts in rural Minnesota for both parties. The House GOP and Senate DFL are both defending crucial outstate seats this fall when voters determine the Legislature's new makeup.

The $259 million will come out of the state's projected budget surplus of $900 million for the remainder of the two-year budget cycle.

Negotiators also agreed to a property tax exemption for the proposed professional soccer stadium in St. Paul, requested by city officials and Minnesota United FC owners.

Legislation mandating rules for police departments using body cameras will head to the House and Senate floor after a conference committee worked out differences.

The final measure will allow public access to bodycam videos filmed in private residences when a police action results in substantial bodily harm or an officer fires a gun but doesn't hurt anyone. Subjects of videos in private areas can also access and release them to the public.

The bill requires local governments to hold public hearings on decisions to buy body cameras and set policies on how they will be used.

Rep. Tony Cornish, a sponsor of the bill, said the state isn't requiring all police departments to have body cameras. "It's their choice," said Cornish, R-Vernon Center.

Earlier, an official from the state Bureau of Criminal Apprehension voiced concern over the bill's provision allowing officers to review body camera video before writing incident reports. He said that there's still debate among state investigative agencies over whether it is appropriate for police to have that authority, and pushed for more time to examine whether the practice should be adopted. Other critics have opposed the provision because they want to preserve police officers' first impressions of an event without the influence of a video.

But the final bill keeps that authority. Cornish said that not allowing officers to see the video beforehand gives them less stature than suspects, who under the legislation can review their videos before choosing to give a statement.

As talks continued, the House gave approval to other legislation that would establish a presidential primary and also change how state worker union contracts are ratified.

The House voted 106 to 23 to establish a presidential primary, a measure sponsored by outgoing Rep. Tim Sanders, R-Blaine.

A measure that would change how union contracts for some state employees are ratified also saw passage, after debate highlighting ideological differences. Sponsored by Rep. Steve Drazkowski, R-Mazeppa, the bill passed on a 69-61 vote.

The bill seeks to remove from law a provision allowing for interim ratification of state contracts on a tie vote by a legislative committee. That provision currently applies when the Legislature is not in session.

The legislation also would require that union talks be open to the public. It further bans unions from using dues to make political contributions.

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