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House tax bill is 'Ain't My Fault' effort

Minnesota House Tax Chairman Greg Davids talks about a tax bill his committee debated Tuesday, April 24, 2018. Don Davis / Forum News Service1 / 3
The Minnesota House meets Tuesday, April 24, 2018. Among bills members debated was one to regulate fantasy sports. It failed. Don Davis / Forum News Service2 / 3
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ST. PAUL — Republicans who control the Minnesota House and Democratic Gov. Mark Dayton do not agree on many aspects of tax policy, but they do agree tax laws need to change before lawmakers end their 2018 session in less than a month.

House Tax Chairman Greg Davids, R-Preston, named his bill after the Brothers Osborne country song "It Ain't My Fault," which expresses the feeling of Minnesota leaders. The name, which he announced Tuesday, April 24, is in response to new federal legislation that without state action would raise income taxes on 900,000 Minnesotans.

The number is high because Minnesota income taxes are based on federal tax law, and since federal officials made dramatic changes it affects how much is paid in state taxes.

There is not enough money available to completely shield Minnesotans, Davids said. His bill would raise taxes on fewer than 180,000 Minnesotans, the chairman said, adding that is the best he can do.

Revenue Commissioner Cynthia Bauerly, a Dayton appointee, and other Democrats say the Davids bill gives businesses too many tax breaks. Davids said he wanted to give more breaks to businesses than he did in his bill, but instead provided more breaks to individuals.

The Davids bill would reduce second income tax tier from 7.05 percent to 6.75 percent by tax year 2020.

Despite that change, Bauerly said, the rich do better under the House bill that was announced last weekend.

"The wealthiest Minnesotans would receive tax cuts that are both larger in amount and as a percentage of their income than low and middle-income Minnesotans will receive," Bauerly said. "Minnesotans earning the state's median income of $65,000 would receive an $82 tax cut, which is $254 less than the cut for those earning $150,000."

Davids said that he will work with the administration to produce a bill that can be signed into law. Otherwise, he said, Minnesotans "will have to keep two sets of books" to file federal and state income tax returns.

He said the full House could vote on the tax bill as early as Monday or Tuesday.

Fantasy sports bill loses

An effort to approve regulations about daily fantasy sports games fell in the House Tuesday 74-48.

"This is a piece of legislation that provides guidelines, nothing more," bill sponsor Rep.Tony Albright, R-Prior Lake, said. "It is not an expansion."

Opponents said the bill would protect existing lage fantasy sports companies.

"They are going to fence out everyone else," Rep. Steve Drazkowski, R-Mazeppa, said.

The $1,500 fee that would be charged fantasy sports companies would keep small firms out of the business, he said.

"I am not hearing support for this bill from any of my constituents," Drazkowski said. "Not one. The silence is deafening."

Some Democrats said they could not support the legislation unless it provided some money to help gambling addicts.

But Albright argued that the bill would "stop bad actors from hurting our constituents."

Lawmakers look at nitrate

Rural lawmakers spent much of Tuesday looking over a nitrate fertilizer restriction the Dayton administration proposed.

Key legislators said it would take time to know if it was better than an earlier draft proposal. If they have concerns, they held open the possibility of passing a bill before the Legislature adjourns on May 21 to delay implementation of any order.

The administration would ban most use of nitrate fertilizer on frozen ground in the fall.

The rule only would apply in parts of the state with existing water system problems and areas with soil that would allow fertilizer to easily get into groundwater. For the most part, that is from central Minnesota to the southeast.

The earlier proposal was not well received, rural Republican lawmakers said, in a large part because the administration has a history of issuing rules without talking to farmers first.

The administration's plan calls for public hearings this summer and for the governor not to sign a new rule until January.

"The are trying to work with us," House Agriculture Policy Chairman Paul Anderson, R-Starbuck, said.

Anderson and Agriculture Finance Chairman Rod Hamilton, R-Mountain Lake, said the rule probably would not affect many farmers because it makes little economic sense to apply fertilizer to frozen ground since a rain or snow melt would wash it off cropland.

Northern counties are not included in the rule either because of climate or because there are few farms.

Anti-gun sit-in begins

A newspaper poll showing Minnesotans support background checks before gun purchases spurred a Democratic representative to conduct a 24-hour sit-in on the state House floor.

Rep. Erin Maye Quade of Apple Valley announced the sit-in just before the House adjourned for the day Tuesday.

In a tweet, she said: "90 percent of MNs support background checks. Students marched, parents rallied, survivors pleaded, yet there's been no vote. Today, I begin a 24hr sit-in on the #mnleg House floor. I will share the stories of victims and survivors that deserve to be told in this chamber."

Fellow Democrats joined her in the front of the chamber.

Republicans who control the Legislature have allowed little debate on gun restrictions, saying their priority is school safety. They said gun-control legislation would not get enough votes to pass.

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.