Talking Points: Will lawmakers agree on a Social Security tax bill?

ST. PAUL, Minn. -- The Minnesota Legislative session continues to steamroll along with the governor expected to sign the "driver's licenses for all" bill this week. But other bills are slower taking shape, like a tax bill.

Minnesota is currently one of 11 states that taxes Social Security income. It has long been a priority for Republicans to eliminate that tax. And for a few days last year it looked like it might happen. 

Gov. Tim Walz, the Republican-lead Senate and the DFL House all agreed on a tax bill that would eliminate the tax. But that was last year.

This year, with a remaining $17 billion surplus, Social Security continues to be a hot issue. And with the DFL in control, the Social Security tax is once again on the table.

While Republicans continue to propose eliminating the tax, Walz has an income-based phase out.

The governor wants to reduce the Social Security tax for 350,000 Minnesotans. The tax break would begin phasing out for families making more than $120,000. The average reduction is estimated to be about $278 per year.

Republicans may be in the minority, but they do have one major leverage point. Last session, the legislature could not come to an agreement on a $1.4 billion infrastructure bill for thousands of projects across the state. But a bonding bill requires the state to borrow money so the cost can be spread out over time. But to do that, 60% of the House and 60% Senate would have to vote yes, and that would require votes from Republicans.

Sen. Bill Weber is the ranking Republican on the Senate Tax Committee and was a guest on WCCO Sunday Morning.

"The Republicans would like to see a bonding bill happen. We recognize the importance of our PFA projects for our local communities, their water and wastewater projects. But we also believe that when we have historic surpluses, we need to be giving money back to the people of Minnesota. And you can't be doing that upfront and first and foremost, then you begin to question whether the majority really intends to do it," Weber said.

Because interest rates are higher now, there is also a proposal to use the surplus to pay cash for the infrastructure projects, which would not need Republican support.

As for those much-debated rebate checks that at one time were called "Walz checks," this time Walz wants singles making less than $75,000 to get $1,000 and couples making less than $150,000 to get $2,000 dollars. Families with children could get up to $2,600.

Republicans want to give a rebate check to every Minnesotan regardless of income: $2,500 to joint filers and $1,250 for single filers.

You can watch WCCO 4 News Sunday Morning with Esme Murphy and Joseph Dames every Sunday at 6 a.m. and 10:30 a.m.