Gov. Mark Dayton snuffed out the latest "smokin' hot" tax bill passed by Legislative Republicans with a post-session veto.
The first "smokin' hot" tax bill (and we wish our legislators would quit talking like some lounge lizard on the prowl) was vetoed prior to the Vikings Stadium debates.
The first bill contained a freeze on the statewide property tax levy for businesses and cabin properties, improvements in the research and development tax credits to spur investment, an upfront sales tax exemption on capital purchases by businesses and a sales tax exemption for data centers that includes computer equipment. It includes property tax relief for homeowners facing large tax increases and income tax credits for businesses hiring veterans.
It was costly, at $48 million for the current biennium and $145 million in the coming biennium. Dayton said it blew a hole in the state budget without legislators figuring out how to pay for it.
The second bill was scaled back, to a cost of about $46 million. Still too much, said the governor. And so the Republicans's top jobs climate priority was shot down.
There was a need for this kind of tax break for businesses which were hammered last year by the elimination of the Homestead Tax Credit last year. That shifted a big property tax burden from the state to local businesses, an unintended consequence of the budget deal that ended the state government shutdown.
It's hard to fix the state's tax system, however, by focusing on one class of taxpayer. Solving one taxpayer's problem often leads to a new problem for someone else. The state need a major tax system overhaul.