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Legislature: Construction spending up, taxes down slightly

ST. PAUL — Public construction projects across the state will receive more than $1 billion while some Minnesotans’ property taxes will fall slightly after legislators wrapped up two key bills Friday.

When Gov. Mark Dayton signs the measure, which is expected soon, public works projects will receive $857 million obtained by the state selling bonds, with another $199 million coming from a state budget surplus. The Capitol building is the biggest single project, getting $126 million to finish a multi-year renovation project.

Higher education construction spending, divided among the University of Minnesota and Minnesota State Colleges and Universities campuses, totals $240 million

While public construction spending is significant, tax cuts are in the cards this year after Democrats in control the Legislature and governor’s office increased them about $2 billion a year ago.

As this year’s legislative session wound down Friday, lawmakers lowered xes $103 million, making the year’s total tax cut $556 million in two tax bills.

Just one lawmaker voted against the Friday tax bill, which features an average $410 tax relief for Minnesotans who live on their farms.

Homeowners will see a one-time increase in homestead credit refunds of 3 percent, an average of $837 per home. Renters’ credit refunds will go up 6 percent, an average of $643.

Friday’s tax bill also:

•Provides $4.5 million this year and $10 million a year in the future for 83 counties to manage aquatic invasive species prevention programs.

•Gives 14 rural counties a $500 per-person payment to recruit and retain volunteer first responders, such as firefighters.

• Allows National Guard members’ military pay to be treated like active-duty personnel, lowering their taxes.

• Gives $4.5 million in tax breaks that five cities near North Dakota and South Dakota can give businesses and apartment properties.

• Requires study on the Minnesota impact of the North Dakota oil boom.

Local Government Aid for cities will go up $10 million after lawmakers boosted it $80 million last year. County Program Aid the state increased last year helped most counties, but 11 rural ones ended up losing money; Friday’s bill provides one-time payments to those counties.

Sen. David Osmek, R-Mound, said last year’s attempt to lower property taxes by giving local governments more state money did not work because property taxes rose.

“I think we need to be very careful,” Osmek said. “Giving local government more money doesn’t equate to tax decreases, it just equates to more spending.”

The bonding bill passed the House and Senate easily, but there were complaints.

Sen. Roger Chamberlain, R-Lino Lakes, said the bill contains plenty of money for Minneapolis and St. Paul, but not enough for the rest of the state. For instance, he said, dams across the state are falling apart and state aid is needed to fix them.

He also complained that the bill lacks enough money for local roads and bridges.

The bonding bill contains funds to build University of Minnesota Twin Cities laboratories to study bees and aquatic invasive species.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.