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Tim Pugmire
St. Paul, Minn.

City officials, business groups testify on Senate tax bill

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City and county officials are criticizing a proposed Senate tax bill, but business groups are praising the measure.

Local officials testified against the Republican-sponsored bill Thursday during a Senate tax committee hearing. They object to the proposed reduction of about $640 million in state aid over the next two years in state aid to local government, but the bill also includes a phase-out of the statewide commercial property tax.

Mike Hickey of the National Federation of Independent Business said that provision would benefit a lot of small business owners.

"This is really going to help a lot of businesses that are struggling and have this very big fixed cost to pay no matter how they're doing," Hickey said. "I've looked at various statements, and it ranges from about maybe 20 to 33 percent. So, this is certainly going to help people."

Ernest McNeal of Plymouth testified against a cut in the renter property tax refund. McNeal said he lives in subsidized housing and uses his refund for other living expenses.

"The [renter's credit] money that we get is so little, it goes right back into the community," McNeal said. "So, to cut it is just, you know, why take from the poor?"

Veterans testified in favor of a tax exemption for military pensions. Representatives of two education groups spoke against a tax credit for private school tuition.