Letter to Legislative Leaders and Tax Conferees

May 13, 2015

The Invest in Minnesota Coalition is writing to urge you to oppose a large tax bill that puts Minnesota’s future prosperity at risk. In particular, we ask you to avoid tax provisions that skew to benefiting the wealthiest Minnesotans.

Our coalition has worked for more than a decade to make our tax system fairer and raise enough revenue to sustainably fund critical state services. The 2013 tax reform bill made important strides in this direction, ending more than a decade of frequent budget deficits and making our tax system less regressive. The recent Tax Incidence Study demonstrates that Minnesota has substantially narrowed the gap, but the highest-income Minnesotans still pay a smaller share of their incomes in state and local taxes than other Minnesotans.

Minnesota has only recently turned the corner after more than a decade of frequent budget deficits. Large tax cuts would jeopardize our ability to maintain adequate funding for critical state services. In particular, we urge you to avoid provisions that phase in over time, which mask the true cost of tax cuts and the long-term consequences. For example, when fully phased in, the elimination of the state general levy would cost approximately $2 billion and the full exemption of Social Security income would cost around $1 billion. These costly provisions are not fiscally responsible, and risk a return to deficits and a lack of funding for schools, nursing homes and other critical public services that contribute to a high quality of life for all Minnesotans.

Tax decisions this year should continue to prioritize a fair tax system and focus on low- and middle-income households. Therefore, we strongly oppose cuts to the estate tax. The House estate tax provision comes on top of substantial cuts made last year, and would cost an additional $123 million in FY 2018-19 and even more in future years.

A wiser investment of limited resources would be to expand tax credits such as the Child and Dependent Care Credit and Working Family Credit, which have a proven track record of benefiting working class families and the economy as a whole.

The state’s positive budget situation is an opportunity to keep us moving forward. We must continue to prioritize tax fairness and investments in a future of shared prosperity, rather than enact large tax cuts that put services Minnesotans count on at risk.

Thank you for your leadership.

Sincerely,

AFSCME Council 5
ARC Minnesota
Children’s Defense Fund
Education Minnesota
Growth & Justice
HOME Line
Hunger Solutions
ISAIAH
Jewish Community Action
JOBS NOW Coalition
Joint Religious Legislative Coalition
Land Stewardship Project
League of Women Voters Minnesota
Metropolitan Consortium of Community Developers
Metropolitan Interfaith Council on Affordable Housing (MICAH)
Minnesota AFL-CIO
Minnesota AFL-CIO Retiree Council
Minnesota AIDS Project
Minnesota Association of Professional Employees (MAPE)
Minnesota Budget Project
Minnesota Coalition for the Homeless
Minnesota Consortium for Citizens with Disabilities
Minnesota Council of Nonprofits
Parents United for Public Schools
Project for Pride in Living (PPL)
River Valley Action
SEIU Local 284
SEIU Minnesota State Council
Sierra Club North Star Chapter
Take Action Minnesota
Transit for Livable Communities