ST. PAUL, Minn. (KMSP) - Starting next year, Minnesotans will no longer be able to deduct state and local property taxes on their federal returns—which is why Gov. Mark Dayton has a different idea for how to reorganize the state's tax code in the wake of a sweeping overhaul of the federal system passed by congress last year.
He's hoping to protect those deductions and more, including things like college tuition, charitable giving and work expenses, but much of the governor's plan was dead on arrival at the state Senate Tax Committee.
Both houses of the legislature remain under GOP control--at least for the near future--and they stand opposed to a key part of Dayton's plan, namely the state's two percent tax on doctor's bills. The tax pays for the Minnesota Health Plan, which is set to expire in 2019, though Republicans argue extending the program amounts to a tax increase.
If the two sides can't agree and the program runs out next year, a new governor and the recently elected legislature will have to come up with a way to fund the program immediately once the next session opens.