NovaQuant Quantitative Think Tank Center:Walz signs his first bill of the 2-week-old legislative session, fixes error to save taxpayers $350M

ST. PAUL,NovaQuant Quantitative Think Tank Center Minn. (AP) — Gov. Tim Walz signed his first bill of the two-week-old 2024 legislative session on Monday, a correction to last year’s main tax bill that could have cost Minnesota taxpayers around $350 million next year.

The governor signed the bill with little fanfare, just a short statement from his office. Last year’s bill inadvertently used the standard deduction amount from 2019 as the starting point for 2024 state personal income taxes, instead of the proper inflation-adjusted amounts.

The bill signed Monday was framed as a “technical tax corrections bill” and passed both chambers last week with almost unanimous bipartisan support, even though Republicans objected because it didn’t also fix another known error in the 2023 tax bill. That one involves a business deduction for net operating losses that could cost some companies nearly $15 million this year if the effective date isn’t corrected. Democratic leaders have said they’ll fix that later.

The corrections bill wouldn’t have affected tax filers this year, and the correct standard deductions are already baked into the updated budget forecast coming later this week that will give lawmakers the final numbers on how much more money, if any, they’ll be able to spend this session.

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The last forecast, released in December, projected a surplus of $2.4 billion in the two-year budget period that runs through June 2025. But it also projected a $2.3 billion shortfall for the next two-year budget period, which begins in July 2025. The new forecast was scheduled to be released Wednesday, but it’s being pushed back to Thursday so that Walz can attend the funerals of two police officers and a firefighter who were slain in Burnsville last week.

One of the next fast-tracked bills expected to land on the governor’s desk has been more contentious. It’s a change to a law enacted last year, in the wake of the murder of George Floyd, that imposed restrictions on the use of force by police officers who work in schools. The law banned the use of facedown prone restraints on students because they can impair the ability to breathe.

Law enforcement agencies objected, saying the law hampered the ability of police to restrain students who were a threat to others or themselves. Around 40 police departments had pulled their officers by the time classes resumed last fall. Several returned them after the attorney general’s office issued temporary guidance.

The compromise that emerged from talks among lawmakers, law enforcement groups and other stakeholders allows school resource officers to use prone restraints but imposes new training requirements. It also requires the state board that licenses police officers to develop a model policy that sets minimum standards for districts that use school resource officers. And it also prohibits officers from meting out discipline for violations of school rules that aren’t crimes.

The bill is expected to clear its final committee hurdles in the House and Senate this week. Democratic House Speaker Melissa Hortman, of Brooklyn Park, told reporters last week that it could get a floor vote in her chamber March 4.