MPR: Senate Approves Rebate

Senate Approves Rebate
by Mike Mulcahy
February 10, 2000

The Minnesota Senate today jumped to the head of the line among those at the Capitol trying to give your money back. The Senate approved a bill that would rebate $453 million of sales tax money to taxpayers. DFL leaders say this rebate would be more fair than last year's because it would go to more people. Republicans say some of the money would go to people who don't deserve it.

Follow the Bill
The DFL-backed plan approved by the Senate is Senate File 2400. See a copy of the bill or see its current status.

THE SENATE STRUCK FIRST in the year 2000 rebate race with a plan that would send an average check of about $200 to families in the state and $100 to individuals. The Senate bill also includes $23 million in aid for farmers in 34 counties that were declared federal disaster areas last year.

The difference between the bill approved by the Senate and the one proposed by Governor Ventura is how many people would get checks. DFL Senate Tax Committee chair Doug Johnson says the Senate bill gives money to more than 200,000 people Ventura would leave out.

Johnson: The governor is not providing to students, to a lot of senior citizens, disabled, young families who are dependents. An example would be a young couple or a mom with kids living with the parents. Certainly they're making purchases, but they've not been eligible. They need that rebate; those kinds of people.

Johnson says the DFL-backed rebate is fair and balanced, but Senate Republicans say it's neither. GOP Minority Leader Dick Day tried unsuccessfully to add wage earners under 18 to the list of those eligible for a rebate. He says it's not fair to deny them sales tax money while people who get cash welfare benefits and education grants are eligible for rebates.

Day: A kid that's out delivering pizza who's 17 years old and probably paying income, he doesn't get any money, and people that are on welfare, we're giving them a check. So I mean, you figure it out. But that's the Democrat way of doing things. We've got to make sure we take the incentive to work out of people.

Doug Johnson acknowledges welfare recipients would be eligible for a rebate under the Senate plan, but he says there's nothing wrong with giving people help to become self sufficient.

Johnson: There are struggling young families who are trying to get off of welfare that work. They may get some minimal public assistance, and it doesn't seem fair to exclude that income when they're paying the sales tax when they buy items.

Johnson notes that most people under 18 are claimed as dependents on their parents' taxes, and that generally those over 18 are on their own and making their own purchases.

While the governor and the Senate agree on the size of the rebate, House Republicans say it's too soon to say how big it should be. GOP Tax Committee Chair Ron Abrams says the latest budget forecast is due in a couple weeks, and if it shows another big surplus the rebate should be bigger.

Abrams: Now they're locked into a number and we don't know what the February forecast is. It would be a shame if we could do a larger rebate but because of precipitous action for political purposes we would be precluded from doing so.

Abrams says the Senate version of the rebate is cumbersome and expensive to administer. He says by the end of the session he wants to convince the Senate and the governor to permanently cut tax rates, so that in the future the Legislature won't be in the business of rebating money.

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