Almanac: At the Capitol

Taxes were the subject of the day as the Senate rolls out its tax plan and the House tax committee passed its bill.

View the Capitol Update for April 21, 2009.

Another day, another long line waiting for a tax bill.  Lobbyists are again lined up by the dozens to see the details of a tax bill.  This time it's the Senate tax bill that included web sales tax and creates a new 4th income tax tier and adjusts all the brackets.  The changes blink off in 2014.  More details:

The current rates are changed as follows: 5.35 percent to 6.00 percent, 7.05 percent to 7.70 percent, 7.85 percent to 8.50 percent. The income brackets are changed to reflect the inflation adjustment for 2009 as the new base year. The new fourth tier rate is 9.25 percent, and it begins at the following taxable net income levels: $250,000 for married individuals filing joint returns ($125,000 for married filing separately), $141,250 for unmarried individuals, and $212,500 for unmarried individuals qualifying as head of household.

***Update:  Senate Tax Chair Tom Bakk says 85% of taxpayers will be affected by the income tax increases, although he says it's "heavily weighted to high income earners."  Bakk said "we need to start the discussion with the governor" about revenue sources since both need it, the question is if they want to hold down property tax increases and not sell tobacco bonds, then where is the money going to come from?  Bakk said his bill "is more transparent" than the governor's budget.

Republican lead Sen. Julianne Ortman said the governor's plan even with onetime money is better than the Senate tax bill that "increases income taxes on low and middle income people, who'll have no money to send kids to school, fix up their house and cars" and get the economy going again. Minority Leader Dave Senjem said he has a lot of "fear of imposing a tax rate that will not spark interest or make Minnesota a place where we want to grow."  Gov. Pawlenty's spokesman Brian McClung called the bill "outrageous...even by DFL standards, an extraordinary tax hike."

The Vikings just got knocked out of the Senate tax bill. On a 41-22 vote, Democratic Senator John Marty managed to get an amendment passed on the Senate floor that takes out language that would study a new stadium for the Vikings. Tax Chair Tom Bakk pointed out that the Vikings lease is up soon and many "want to make sure the Vikings don't leave." But longtime stadium opponent Marty said there is "no urgency" and Republican Sen. Julianne Ortman (R-Chanhassen) called it a "Hail Mary" pass on the last day, added in tax committee. Many lawmakers want to tackle the topic next year, not this year.