The tax conference report, released by Minnesota lawmakers late Monday, includes both the Ag2School 40 percent school bond credit and a one-year increase in Tier 1 Debt Service Equalization for FY ’19 to address school facility challenges.
The inclusion of Ag2School is welcome news to farmers and schools with bond payments and those considering bond elections in the near future to improve their learning environments. Ag2School would offset an inequitable amount of school facility funding provided by farmers by creating a 40 percent credit on the taxes paid on farmland and forest property for school bonds. That would create a fairer state share in 284 school districts. View impact on ag and forest property.
The increase in Debt Service Equalization called for in the report is very similar to the Senate Tax Bill. View impact on $200,000 home.
What’s Next?
This tax conference report is an essential step to becoming law. But Ag2School was in this position last year when Governor Dayton pocket vetoed the Tax Bill due to a wording issue. This report in its current form could also be heading for a veto.
One concern this year is the size of this tax bill. It tops $1.15 billion in FY ’18-19 and $1.5 billion in the ‘tails’ FY 20-21. In contrast, Governor Dayton’s tax proposal was $300 million in FY ’18-19 with little growth in the tails.
Provisions such as the $23.2 million for tax credits for scholarships for private school tuition also pose concerns. They are philosophical in nature and not amendable to ‘splitting the difference’ sort of compromise. MREA opposes these tax credits. Minnesota has an a constitutional obligation for public school education, not one for private schools.
Resources
Tax Conference Committee Agreement Summary
Tax Conference Committee Report (bill)
