Senate Tax Committee chair Ann Rest, DFL- New Hope (right), and Sen. Matt Klein, DFL-Mendota Heights (left), talked about the Senate omnibus tax bill at the Capitol on Wednesday April 26, 2023. Photo by Michelle Griffith/Minnesota Reformer.
The taxes conference committee on Friday failed to pass almost a dozen motions because nearly half of the committee wasn’t there, in what could be a sign of deepening intraparty and intracameral divisions in the DFL-controlled Legislature.
Reps. Aisha Gomez and Esther Agbaje of Minneapolis, Dave Lislegard of Aurora and Liz Lee of St. Paul were absent from a tax conference committee meeting on Friday afternoon. Because of their absence, all the motions to alter the tax omnibus bill failed because at least three members of each chamber needed to vote.
The sole House member in attendance was Rep. Greg Davids, R-Preston, who voted along with the senators on all the motions.
“I wanted them on the record,” Rest told the Reformer after the meeting, adding that she didn’t know why the House DFL members didn’t show.
Rest said she continued with voting on the motions knowing they’d fail, because she wanted to show people the tax conference committee was doing its work and note the House members’ absence.
“I regret that the House is not here, but our very, very strong directive from both the House speaker and Senate majority leader is that we are here to get our work done and they expect results,” Rest said during the meeting. “The Senate is prepared to do that.”
Rest is known as a strict proceduralist when it comes to the legislative process.
The DFL Senate and House members appear to be at odds over a number of provisions within the tax bill — most notably how the state should generate new revenue.
The House DFL wants to create a fifth state income tax tier targeting wealthy Minnesotans. The new tier would establish a 10.85% tax rate on a Minnesotan’s’ taxable income above $1 million for married joint filers; $600,000 for single filers; and $800,000 for heads of households.
Rest, who’s chair of the Senate Taxes Committee, said she is not supportive of the fifth tier. Her goal — articulated when the Senate passed its own tax bill recently — is to generate new revenue without any tax increases on individual Minnesotans.
Both the House and Senate last week were in agreement about a provision to capture corporations’ foreign revenue, until Rest announced Saturday that it no longer had the Senate’s support. The provision — also known as worldwide combined reporting — would have required corporations to pay income taxes based on their global profits, rather than the portion they declare in the U.S.
Gomez, chair of the House Taxes Committee, said on Twitter this week that worldwide combined reporting is good policy.
House and Senate members on the tax conference committee have been offering deals to each other behind closed doors, but have yet to announce an agreement on how Minnesota should generate income for its ongoing programs.
Sen. Bill Weber, R-Luverne, said in a statement that he hoped further tax negotiations will be done in committee for the public to see.
“I really hope House Democrats aren’t expecting the tax bill to be negotiated behind closed doors. We might not agree, but Minnesotans deserve to know each legislator’s position and see the process work,” said Weber, one of the tax conference committee’s two Republican members.
No matter the outcome of the debate on how to produce new revenue, the bill will also likely include a tax rebate for most Minnesotans, a child tax credit and a significant boost in local government aid.
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