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Your job: give back $4 billion to taxpayers

A joint committee has the task of deciding in a matter of days how to return $4 billion of the state's surplus to taxpayers.

ST PAUL, Minn. — It may sound like the improbable plot from a Hollywood scriptwriter; put 10 people in a room and tell them to figure out in just a few days how to give away $4 billion.

But that's exactly what's happening at the Minnesota State Capitol. And, in this case, is a group of people who don't have the best track record of agreeing on money matters.

We're talking about the Tax Conference Committee, a panel made up five state senators and state representatives. Five of the members are Republicans and five are Democrats. Their job is to come up with one plan to deliver $4 billion in tax relief across the next three years.

Those 10 lawmakers must choose the right mix of tax rate cuts, tax credits and instant rebates to get to that $4 billion target and produce a bipartisan bill.

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"There will be certainly tax cuts, and there’s also property tax aids and credits which led to property tax cuts," Rep. Paul Marquart, who is the co-chair of the conference committee along with Sen. Carla Nelson, told KARE Wednesday.

"We’ve been negotiating. I've talked quite a bit with Chair Nelson, and we're making good progress. I’m hoping in the next day or so we’re going to get this done. We’re moving in the right direction."

The panel met briefly Wednesday morning, then decided to recess until further notice while individual members try to negotiate details in private conferences. That didn't happen as quickly as hoped, as they didn't reconvene later in the day.

It's always a heavy lift with a lot of give and take, but it's more complicated than usual because the people on that committee got very little direction.

"Often when there’s a global agreement there’s usually some absolutes — you have to put in A, B and C," Marquart explained. 

"This time the governor, the House Speaker, and the Senate Majority Leader simply said to do $4 billion in tax relief over the next three years and the tax chairs and the conferees will determine where those taxes will go."

They've got to hammer out a plan with enough time left for the House and Senate to pass it without any changes before 11:59 p.m. Sunday.

One big unanswered question is whether the committee can find room for rebate checks, which Gov. Tim Walz has been touting all session as a way to return part of the record surplus to the taxpayers. He proposed $500 checks for single tax filers and $1,000 checks for joint filers, but his plan didn't make it into either the House's tax bill or the Senate's version.

"That's part of the mix. And I have been in contact with the governor's office, and he's made that clear it's a priority for him," Marquart explained.

"Certainly, that is a very high priority for Governor Walz and it's certainly going to be part of the mix in negotiations."

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Walz had initially pushed back against the Senate's plan to permanently cut the lowest income tax rate in Minnesota's four-tier system, because the wealthiest taxpayers would also reap benefits. But the committee may find a way to tweak the tax brackets to even things out, according to Marquart.

"As you provide rate cuts, you try your best to get them to people who need it the most, who are going to be helped the most, so that’s certainly going to be a big goal for Governor Walz as well as the House."

The 2022 Session ends Monday, May 23 but lawmakers can't pass any legislation on the final day of a two-year session, so they effectively must wrap up work Sunday night. Monday would be reserved for retirement speeches.

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