House Taxes Committee recommends constitutional amendment to return budget surpluses to taxpayers

At a Minnesota House Taxes Committee hearing, members voted to recommend House File 4, a proposed constitutional amendment that would create a tax relief account to return certain projected budget surpluses to taxpayers, sending the bill to the House Ways and Means Committee.

The bill’s author, Representative Johnson, said the proposal would ensure that when projected revenues exceed 105% of projected expenditures as determined by the November forecast, surplus money would be placed into a tax relief account for refund to the people who paid it. "If passed by the voters, the amendment would establish a tax relief account that would be funded using money from a projected surplus," Johnson said. The committee first adopted the H0004A1 amendment to put the bill "in the shape the author likes" and then moved the bill forward.

Proponents said the amendment would return money to taxpayers who they said are struggling with high costs of living. Ray Anna Lee, legislative and coalitions director for Americans for Prosperity in Minnesota, testified in support and said, "After all, Minnesotans, not government officials, are the best stewards of their hard earned money." Lee urged consideration of triggers for tax-rate reductions, bracket consolidations and changes to budgeting practice to reduce volatility.

Opponents and budget experts told the committee they were concerned that embedding tax and budget rules in the state constitution would limit policymakers' ability to respond to changing conditions. Nan Madden, director of the Minnesota Budget Project, argued that "the legislature already has the authority to use projected budget surpluses for tax rebates or tax cuts" and said placing such rules in the constitution would "tie your hands," limit responses to emergencies and blur lines of accountability.

Committee members voiced varied reactions. A member identified as "the gentleman from Lyon" expressed support, saying returning money to taxpayers was desirable and that he planned to support the bill. Representative Witton said she had heard from seniors on fixed incomes and supported the bill so individuals could manage their budgets. Chair Davids presided over the hearing and the voice votes adopting the amendment and recommending the bill to Ways and Means.

Procedural actions at the hearing: Representative Johnson moved adoption of the H0004A1 amendment; the committee adopted the amendment by voice vote. Johnson then renewed his motion that House File 4, as amended, be recommended to pass and be sent to the House Ways and Means Committee; the committee approved that motion by voice vote. Department testimony was not present at the hearing, and no roll-call tallies were recorded in the transcript.

Supporters framed the measure as returning money to taxpayers and reducing pressure from high government spending. Critics urged caution about constitutionalizing budget rules, saying the change could prevent future governments from responding to recessions, emergencies or shifting priorities. The bill will next be considered by the House Ways and Means Committee.