Legislature’s Special Session Wrap-Up: Estate Tax, Healthcare & More
As I mentioned in my previous post, the Legislature ended its special session early Friday morning. Here’s the rest of what was decided.
Minnesotans On the Move
How to keep Minnesotans from exiting the state for good, or severing all financial ties with the state after establishing residency elsewhere?
Estate tax: The death tax was not repealed but the threshold will be gradually increased from the current $1.8 million to $3 million by 2020. The federal level is $5.49 million per person.
Dayton’s Department of Revenue has gained a reputation for being aggressive with Minnesotans who declare residency elsewhere (the state tries to claw them back using on-going relationships like an accountant against them). The law would prohibit the state from using trusted relationships like accountants and financial advisers based in Minnesota to argue that people who have established residency elsewhere are still Minnesota residents (i.e. taxpayers).
We want Florida and Arizona retirees to keep using Minnesota-based professionals.
The annual inflation for the statewide property tax was also eliminated, and the first $100,000 of a property’s market value will be exempt from the state levy. The goal is to eliminate it entirely.
This was an interesting bill that developed during the special session. It contains the pre-emption language Gov. Dayton has promised to veto but also approves 6 weeks of paid parental leave for state employees that the Governor and Lt. Governor Tina Smith prize.
The pre-emption language asserts that cities cannot set terms of employment (minimum wage and paid leave) for private employers, creating a patch-work of rules all over the state. The bill also clarifies existing law on “wage theft” and provides remedies for people who think they have not been paid for work done. Pension reforms are also in the bill which we will address in detail if the Governor signs it.
Priorities That Are Now Law
Protecting Minnesotans from Obamacare: A health care measure offering premium relief for Minnesotans who are harmed by skyrocketing premiums under Obamacare. This is a taxpayer subsidy in recognition that government caused this failure, not policy holders.
The bill allows Minnesotans to buy insurance in the individual market and makes it easier for small businesses to self-insure. Similarly, there was $542 million set aside to fund a reinsurance program to pay for people with high health cost claims. Much of this set aside will not need to be spent because the federal government will be paying for a portion of the program. This stabilizes the market while Congress grapples with Obamacare.
Again, this was one of those moral imperatives but also stabilizes the insurance market. Dayton did not sign the bill but let it become law by letting three days lapse without his veto.
Real ID: After years of bi-partisan opposition due to concerns about data privacy, illegal immigrants getting IDs to vote and letting the federal government set state standards for issuing a license, the law passed. Under a waiver, Minnesota will have until October 2020 to bring its licenses into compliance. In the meantime, you can fly with your current ID. If you do not want to get an “enhanced” ID, you can fly with your passport. Illegal immigrants are not supposed to get a license pursuant to state regulation (the prohibition was struck from the bill to get the bill passed).