There is absolutely nothing for the middle class in the new budget
On Monday, the state legislature passed a budget that will grow government spending by 33% by 2027. It has often been claimed — falsely — that this budget contains “the largest tax cut in state history.”
The main component of these alleged “tax cuts” comes in the form of a new child tax credit of up to $1,750 per child and an expansion of the K-12 Education Credit to $1,500 per child.
But the average Minnesotan won’t see a penny from this. For a couple with two kids, the credits begin to phase out at a combined income of $35,000 and they cut off completely at an income of $67,083.
To put that in context, the Census Bureau says that the median income for a family of four in Minnesota is $115,252. That average, middle-class family is way above the cut-off for these tax credits. They won’t see anything.
That isn’t quite true. That family will get a check, probably in the autumn, for $1,040.
But, against that, there are tax hikes coming. The state will begin indexing the state gas tax with inflation starting in January. Vehicle sales tax and annual car tab fees are going up. There will be a new three-quarter cent sales tax in the seven-county metro area. There is a new 50-cent retail delivery fee on orders over $100.
Overall, then, that median, middle-class family will probably find Minnesota a more expensive place to live after this session than before it. And that was when we had an $18 billion budget surplus.