ST. PAUL — The tax bill passed with bipartisan support in the Minnesota Senate last week will directly benefit about 50 percent of taxpayers with tax cuts, according to District 16 Senator Gary Dahms, R-Redwood Falls.

The bill will directly or indirectly hold all Minnesota taxpayers harmless, expands relief to seniors, parents, small business owners, veterans, encourages affordable housing investment and reduces property tax burdens, Dahms said.

“This bill protects Minnesotans. It lowers taxes, increases wages, and grows our economy,” Dahms said. “It helps more parents with education costs, allowed small business owners to expand, and helps farmers with their operations.”

Dahms said the bill allows senior citizens to keep more of their social security dollars, gives the middle class an income tax rate cut, and includes tax conformity to make everyone’s lives easier.

Senate File 5 includes a .25 percent middle-class rate cut to the second-tier income tax bracket, reducing the rate from 7.05 percent to 6.8 percent beginning tax year 2019. It reduces the rate to 6.67 percent in tax year 2022. Dahms said its the first Minnesota income tax cut since 2000.

“The bill expands the ability for businesses and farmers to deduct equipment purchases to grow and invest in their operations and reduces the statewide property tax levy by $50 million per year beginning in 2020,” Dahms said.

Other parts of the tax bill create funding for affordable and workforce house development and lowers taxes on affordable housing. It also allows charitable gaming organizations to put more back into the community and reinstates Angel credits to promote investment in rural Minnesota businesses.

The K-12 Education Tax Credit is expanded to include pre-school expenses and made available to more parents by increasing the income threshold. The innovative Opportunity for All Kids (OAK) scholarship program was created by the bill, allowing charitable donations to fund education scholarships for children of low-income parents.

Additional school district equalization aid is available to help districts with low-tax capacity and funds are available to assist with the Indian Child Welfare Act (ICWA) compliance.

Senior citizens will keep more of their Social Security money by increasing the income tax subtraction from $4,500 to $6,150.

“Our aging population has been taxed once to earn Social Security, and Minnesota is just one of 13 states that imposes a second tax on Social Security benefits. The Veteran Homestead Exclusion is extended to benefit more veterans and their spouses.

Dahms said the transportation bill passed by the Senate includes an increased fine for drivers who do not move out of the left and an exception for drivers who exceed the speed limit by five mph when passing.

The transportation bill creates an electric vehicle annual tax and ensures that trunk highway funds are spent only on improving roads.

Dahms said the Health and Human Services Bill works to ensure there are programs to prevent fraud by establishing oversight for many programs. It increases reimbursement rates for those who care for people with disabilities and the elderly.

The bill helps reform and reign in prescription drug prices, focusing on pharmaceutical price transparency. It reforms childcare licensing so that providers are not driven out of the business due to over-regulation.

On Thursday, the Senate passed legislation prohibiting the Minnesota Department of Transportation (MnDOT) from enforcing requirements for mowing and baling along state highway rights-of-way.

Dahms was the chief author in Senate File 1889 that prohibits MnDOT from requiring, issuing, or enforcing permits until April 30, 2020.

“This bill continues the moratorium on MnDOT’s enforcing permitting requirements so farmers, landowners, legislators, and the new governor’s administration can come together and find a permanent, bipartisan solution,” Dahms said.

A similar bill was introduced in the House of Representatives but unfortunately, has not received a hearing, Dahms said.

“We have the opportunity to do the right thing in getting folks together to work this out,” Dahms said.

Fritz Busch can emailed at fbusch@nujournal.com.