April 18, 2023
This week the House Tax Committee unveiled their Omnibus Tax bill. Some of the more well-followed provisions include: (1) rebate checks, although more modest than the Governor’s proposal at $275 per person; (2) additional social security tax exemptions (but not full elimination of the tax); (3) family and senior tax credits; (4) property tax relief for people that see significant increases; and (5) tax changes that will generate roughly $1 billion in new revenue.
EDAM members have been supportive of two tax provisions: the Historic Structures tax credit and the Angel Investor tax credits. Unfortunately, neither of these important provisions are included in the House Tax Omnibus bill. We expect these provisions to be included in the Senate Omnibus Tax bill, which is expected to be released later this week or early next week. Even though the DFL controls both Legislative Chambers and the Governor’s office, expect some disagreement on the tax bill, especially over local option sales taxes and the creation of a 5th tier of income tax.
In addition to the House Tax bill, many other omnibus bills are making their way through Finance and Ways and Means and onto the Senate and House Floors – including the Jobs and Economic Development Omnibus bills. These omnibus bills have been combined with the Labor and Industry Omnibus Bills and will be conferenced together as one package.
We expect conferees to include the chairs of each of these committees from the House and Senate and then one to two other members from each chamber. We expect conferees to be named later this week or early next week. Once this happens, we can start advocating for the Senate position on the Redevelopment Fund, which includes an increase, while the House Version does not. EDAM leadership will be submitting a letter to all conferees, and we will determine what additional advocacy actions might have a positive impact. If your elected official is named as a conferee on this bill we will be in contact on how you can help drive home EDAM’s message.
Another attention-grabbing piece of legislation is closer to the House and Senate floors - Paid Family and Medical Leave (HF2/SF2). EDAM has not taken a position on this legislation so this is to serve as an update only. In both the Senate and House bills, the State will allot $670 million to get the program started. Employers and employees will then split a payroll tax of .7%. After working for an employer for three months, employees could take up to 12 weeks off for a qualifying medical event or to care for a family member. Employees would be entitled to their same or similar position upon returning. Both instances would require documentation. The Department of Employment and Economic Development will hire approximately 400 full-time employees to administer the program. Grants for small businesses are also part of the proposed legislation in both chambers.
Several provisions differ between the House and Senate versions. For example, the Senate version currently limits the number of consecutive weeks a person could take if they have qualifying family and medical events at 20 weeks. In the House, a person could take 24 weeks (12 weeks per event). Additionally, the Senate version now includes a lower tax rate for businesses under 35 people. The House Workforce Committee debate was centered on providing additional support and exemptions for small businesses. We expect more changes to this legislation, especially for small businesses, as this moves forward and will update EDAM membership.