Dayton's plan preserves savings for state's families

You may have heard that it could be complicated for Minnesota to deal with the new federal tax laws enacted late last year by President Donald Trump and Republicans in Congress. The decision to put Minnesota families first, however, is a simple one. Gov. Mark Dayton's plan:

• Protects 300,000 Minnesotans from state tax increases caused by the new federal tax laws;

• Cuts taxes for over 2 million Minnesotans; and

• Improves family budgets, without risking the stability of our state's budget.

The governor's priorities are simple. He is putting hardworking Minnesotans and their families first with permanent tax relief. The federal law gave only temporary breaks to families — disappearing after eight years — while giving away permanent tax breaks to corporations.

We must protect Minnesotans from state tax increases caused by President Trump's tax laws. Because of how the federal tax code interacts with ours, Minnesota needs to find a way to respond with our own new tax laws, or hardworking families across the state will see tax increases.

If the Minnesota Legislature chooses to do nothing to respond to the 2017 federal tax law, some Minnesotans will pay more in state taxes. Individual state income taxes will increase a total of $59 million and affect over 300,000 Minnesota families, costing an average of $200 per return in higher taxes.

We need to do better for Minnesota.

Gov. Dayton's proposal would cut taxes for over 2 million Minnesotans. That means over two-thirds of Minnesota's households would receive $319 million in tax relief.

In addition to protecting hundreds of thousands of Minnesota families from the state tax increases caused by the new federal law, his proposal cuts taxes in two important ways:

• Creating a new permanent tax credit, cutting taxes an average $117 for over 1.9 million eligible Minnesota families; and

• Expanding the Working Family Credit, cutting taxes an average $160 for 329,000 Minnesota families.

And it would preserve cost-saving deductions for property taxes, mortgage interest, interest on home equity loans, unreimbursed employee expenses, and other benefits that improve the budgets of Minnesota families every year. President Trump's new tax laws reduced or eliminated these benefits.

We can improve family budgets without risking state budget stability. When Gov. Dayton took office, Minnesota faced a $6.2 billion deficit and we owed our school districts $1.9 billion. Since then, the governor has made hard choices to balance the budget, and successfully turned around our state's finances — with nine budget surpluses forecast since 2011. The governor has made clear he will not leave his successor the same fiscal mess he inherited.

That is why the governor is proposing to move the state away from basing state income taxes on federal taxable income, in favor of adjusted gross income. This will give Minnesota more control over the fairness of our own taxes and the stability of our revenue.

The governor's plan pays for tax cuts for those who really need them by matching some of the federal tax changes that will increase state revenue. The largest share of the revenue comes from big corporations who do business in Minnesota and have historically stored profits overseas to avoid paying state and federal taxes. The new federal tax laws gave most of the benefits to big businesses and corporations. About 92 percent of the net total of the federal tax bill, or $1.35 trillion, was given away to corporations.

The governor's plan would also reverse unaffordable tax breaks enacted last year by Minnesota Republicans that threaten our state's long-term budget stability. It would roll back the unsustainable tax breaks for big tobacco companies and large corporations, and the tax cuts for estates worth more than $2.4 million, while maintaining the benefits for family farms and small businesses.

During his final months in office, Gov. Dayton will continue his commitment to tax fairness for working people across Minnesota, without risking the stability of the state's budget. We look forward to working with the Legislature to get that done.