Senate Tax Chair Tom Bakk, DFL-Cook, introduced legislation to reduce Minnesota's state sales tax, decrease the state's massive budget deficit, and increase funding for Minnesota schools.
To accomplish this, Sen. Bakk would implement Gov. Pawlenty's 21st Century Tax Reform Commission's recommendation to expand the sales tax base; by eliminating the exemption on clothing beginning July 1, 2010. Minnesota is one of only five states that still carries the exemption.
“Bold ideas require strong leadership,” Bakk said. “This is a bold plan that, if enacted, would: repay schools more than $120 million a year that Gov. Pawlenty captured in his unallotment aid shift; reduce our budget deficit by more than $257 million in 2011; and permanently reduce Minnesota's general sales tax rate from 6.5 percent to 6.25 percent, saving taxpayers and business owners millions of dollars on purchases.”
According to Bakk, for the current biennium only, the new revenue will be used for deficit reduction due to our extraordinarily difficult budget situation. On July 1, 2011,the general sales tax rate would be reduced by .25 percent and the education aid shift would begin to be repaid.
“It is simply unacceptable to make our schools wait an indefinite amount of time to receive their money,” Bakk said. “My bill will begin paying back schools next year, and once that is accomplished, all new revenue raised from the base expansion will be dedicated to further reduce Minnesota's sales tax rate.”
Sen. Bakk introduced the legislation as an attempt to break the logjam at the Capitol. “This is a good, common-sense bill that I hope the governor can support,” Bakk said. “It lowers taxes on individuals and businesses, adds more stability to the state budget; and repays our schools. It's my hope that both education advocates and the state's business community will get behind this bill and help it become law.”
Minnesota State Legislature
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