Senate GOP starts push for business property tax phase-out

Senate Republicans began a push Tuesday to phase out the statewide business property tax, a move that’s one of the caucus’ top priorities for the session, but would also leave a more than $800 million hole in the general fund each year if fully implemented.

Speaking to reporters Tuesday morning, Senate Jobs Committee Chairman Geoff Michel, Taxes Chair Julianne Ortman and Sen. John Pederson said they hope the jobs panel will approve the measure today. It would then go before Ortman’s committee.

“The gun is going off today for job creators,” Michel said, casting the bill as that will help business statewide. “We need to give job creators a reason to choose Minnesota.”

Later Tuesday, DFL Sen. John Marty criticized the plan in a statement, saying it would not help homeowners dealing with increasing property taxes themselves and calling it a giveaway to corporate and business interests.

“Calling this a ‘jobs’ bill is nothing more than political spin,” Marty said. “The Republican proposal is not tied to job creation in any way. It is simply a business tax cut to all businesses. Eliminating property taxes for Walmart might increase the bottom line at their corporate headquarters in Arkansas, but it won’t put Minnesotans back to work.”

Coming into the session, phasing out the business property tax was among the top priorities for a caucus that some say is under pressure from business interests to deliver after a bruising and somewhat disappointing 2011 session.

Last session, a similar phase-out plan gained support in the Senate, passing through committee and being included in the omnibus tax bill ultimately vetoed by Gov. Mark Dayton. House Taxes Chairman Greg Davids did not include the phase-out in his bill last year, but has gotten behind the move this session.

Differences could remain between the caucuses over the speed at which the tax should phase out. Davids has proposed a plan that would phase the tax out over the next two decades, while the current Senate bill takes just 12. Ortman, for her part, has gotten behind an even quicker phase out, saying Tuesday she backs a six- to eight-year plan.

The statewide business property tax, an 11-year-old levy projected to bring in $1.5 billion this biennium, has been derided in recent years as regressive and anti-competitive. It’s long been the bain of business interests and opponents say it stifles economic growth and skims revenue from the local governments charged with collecting it.

Generally, the tax brings in about $800 million each year, although by law it automatically grows with inflation. In the current biennium, the phase-out proposal would reduce revenues by about $30 million.

Republicans have yet to specify how they’d pay to fill the hole left by the phase-out, although they have been cool to any suggestion that the revenue could be replaced by higher taxes or tightened loopholes elsewhere. On Tuesday, Ortman said it “remains to be seen” how the hole might be filled. Michel said the revenue could be replaced with “spending reforms and spending reductions,” but didn’t specify exactly what those might be.

There are no DFLers yet signed onto the plan, the Republicans said, and they have yet to have any discussions on the measure with the Dayton administration. Michel did say, though, that his committee was meeting with Dayton at the Governor’s Residence Tuesday night and hoped to bring the proposal up in discussions there.

“My office works on bills that I believe are going to pass,” Pederson said.

One Response to “Senate GOP starts push for business property tax phase-out”

1. dipper Says:
   January 31st, 2012 at 2:22 pm

   Michel lied to the public about the Koch scandal. Ortman lied to the public about property taxes. Senjem, the Senate Republican leader, called the Legislature “a family” and immediately presided over a sequence of intentionally divisive actions. This crop of Republicans has no credibility on any subject. It’s time to remove them all.