Bill to eliminate social security tax back on the table

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A bill to eliminate taxes on social security benefits in Minnesota is once again on the table, after it didn’t pass the finish line last session.

A new report by the Minnesota Department of Revenue estimates the average social security taxpayer would save $1,276 if the social security tax was eliminated. But, the state would lose more than $600 million from it’s general fund.

Phil and Rose Ann Paome found a new home in Iowa after living in Rochester for 10 years.

“I did not have a job in Minnesota my entire working life. And now they want to tax my social security benefits,” Phil said about his decision to leave the state.

They have family in both states. The retired couple says choosing the one with no social security tax was a no-brainer.

“We know people who are still living in Minnesota, where medicine and food are a huge concern,” Rose Ann added.

That is the concern for Minnesota Republicans, who have been trying to do away with the tax for years.

“Minnesotans are doing the calculation. What would retirement look like if I moved to a state that didn’t tax my retirement income?” questioned Senator Carla Nelson (R – Rochester.)

The bill, authored by Nelson, was part of an agreement last session between the Republican-controlled Senate and DFL-controlled House. That agreement got held up in the final days, and never passed.

Now, DFL lawmakers control the House, Senate, and governor’s office. Even with the $17.6 billion surplus, some are concerned that removing the tax means less money for things like education.

Senator Liz Boldon (DFL – Rochester) would be voting on the bill should it get to the Senate floor.

“I think we should be using a targeted approach so that the folks we are helping the most are those in the middle income and lower income bracket,” she said.

Senate Majority Leader Kari Dziedzic (DFL – Minneapolis) hinted in a press conference just before session started, that the bill won’t have complete DFL support.

“Me personally? I’m on the record for having deep concerns about that,” she said.

The bill had it’s first hearing last week. It has authors from both parties, and it will have another hearing in the Senate taxes committee Tuesday.