And now it's part of my midday program. We take you to the floor of the Senate wearing Tiaras Bob Potter reports on the debate over a rebate plan for minnesotans, Bob. Good afternoon, Dan. Yes, we're broadcasting live from the gallery of the Minnesota state senate the Senators win the section about 10 minutes ago and are just now beginning the debate on a mechanism for returning the state treasury Surplus to the taxpayers pay the bill is authored by Bill McCutcheon the chairman of the Senate tax committee and the indicated in his opening remarks that the 23 million dollars that he predicted for the State Treasury Surplus in the spring of 1978 has grown and grown and grown to the point where that treasury Surplus is now expected to be somewhere in the vicinity of 225 million dollars because of that the Senate tax committee decided last Friday to recommend passage of a rebate plan that would essentially return the most of that money directly to the taxpayers as quickly as possible.The bill is very simple and it runs only a page-and-a-half. And the Heart of it is that it provides that $75 will be returned to each income tax payer in the state of Minnesota along with $75 for each of that taxpayers dependents. At this moment Senator Robert ashbeck. The minority leader of the Senate is raising a point of order. He's arguing that because this bill essentially involves an appropriation of money in the State Treasury. There is a senate rule which requires that all appropriation bills have to be referred to the Senate finance committee and he is arguing the fat is in fact for the bill should be sent. The president of the Senate is offering his opinions on this. We have heard a little bit from the Senate Majority Leader Nick Coleman, and now let's go down to the floor where Senator Garrety is making his comments. Simple bill but it does is provide for over. This is actually Bill McCutcheon the chief author of the bill chairman of the tax committee. Questions, I would like to point out that while I'm carrying this bill. There was a great amount of effort that went into it on the part of the send a text committee on the part of Staff members in the part of the front of the chairman of the Senate Appropriations Committee and I would appeal to any of those who wish to have a comment on this most important issue with this day. Discussion on the bill, obviously while we were talking sooner to Garrity rule data. It was not appropriate the bill be referred to the finance committee. interact call mr. President members of Senate. first of all, I can indicate Miss presno disappointed that the ruling Are the point of order? It's difficult when you can't believe what you read. I just hope that the if we go down to the station that we will have the rules meaningful. I share some of your concerns centigrade. My distinguished colleague from Ramsey Center McCutchen has a bill here. It's the fourth Bill. We're going to pass the session. Come very early. Look at my watch and I'm sitting here watching and listening Center McCutchen. Today is the 7th Day of February is just 90 days since November 7th. And it's time for the state to pay its quarterly dividend. I think November 7th had a very interesting. impact on this particular piece of legislation Here we are going to return a small portion of our over-taxation for years. to the people of the state of Minnesota The amazing thing is sending McCutchen. But the first time you've acknowledged has been a surplus. Of this magnitude is the administration at least. the jump a hundred billion dollars a day after election in 1975. We had a 400 billion dollar Surplus. We started to buy any of the same kind of a session. There was no rebate given by the majority then. There is very little income tax relief. And mr. President members of Senate. It was a 1977. When we have 280 million dollars laying in the treasury. and the majority said we don't believe it. So what happened? This body pass attacks attacks the pensions of senior citizens on public pension. This body Pastor Bill the tax military pick. This body has to build a raised income tax rates with 280 million dollar Surplus. Does body tax out-of-state income a lot of things of that session? All the time. We had a large Surplus now. We got 228 million dollars with a surplus. And it's 90 days past election day. And I were going to have a rebate. It's interesting to note that a 1978. We offered a small tax package and we were told minority was told that it would break the state. Not like you're beside the members of Senate. We got the same dollars today. We had that. But it's after election. That's the difference. I don't believe that this proposal which appropriates money out of the General Revenue. real life story return to those who need I think it's a rich man's proposal certain that very Progressive. Ffs bill is a political. Political give me designed to embarrass the governor. I think I like make a couple of points. first of all I think the majority knows that this bill has no chance of becoming locked. Sandra Coleman announced last week. We're going to hear it on Friday and boat on at the date. This bill is had no serious public hearings. This is not permanent relief. This is no part of a package that I can see. And now and I think the point is that Governor Qui made a sensible proposal providing more than six times the income tax relief than I've ever been proposed or offered or passed by the past administration. Got to do something to tarnish that image. The try to Scuttle is playing where this plan has been accepted. It's a good plan. It's a balance plan. We're all of us may not agree with every detail. It's there. And it's a fair plan this pain of an approach. I probably can see through. This beside this gimmick. Will not stand the test of time. And I know that you would like to get the Senators to vote against this bill. I'd like you to know I will have no qualms voting against the public is inform the public understands the gimmicks. And I ask all those will think about it see through it don't about no. And her calming let's president and members of the Senate. The senator McCutchen needs no assistance in his work on the tax debate the today but I would like to and I don't pretend to be offering that in any detail at all. But there are some errors in the presentation made by the distinguished senator from Ramsey Senator Ash back and I think they should be brought to the attention of the members. I think that you can say that this bill is that about 2 years of public hearings because we've been talking about rebates for at least that length of time or what to do with money that may or may not be in the Surplus. I think that's an adequate amount of time to inform the public of what's going on the most serious error that the senator inadvertently made was that this body had never tried to pass anything like this before this present members of the Senate. I find it difficult to believe that anybody that was your 1976 as already forgotten how many times we passed a rebate out of this chamber? We tried to rebate that when the in the stadium tax issue of that time of a hug. Million dollars of 150 million dollars we amended it the most of the tax bills that went over to the other body. We negotiated with them all kinds of base's but we were unable to arrive in an agreement with them that the money should be returned to the taxpayers. We left. With some heat that night as I recall and what we did to get out of here and we had done our best and there was nothing more that the ascended could do this Return of the rebates and the taxpayers of Minnesota. Their own money is a senate tradition when the money is there. We have sent it back to them. The other are that they fail to understand is when the distinguished senator says that this is a rich man's bill this president of the chart that the distinguishing honorable Governor Qui used yesterday and explaining his tax program have these illustrations. If you have a $10,000 income your taxes now $330 your new tax would be $254. If you were a family of four with two wage earners and a 75/25 split the proposal at the governor as asking us to consider would have a cut of $76. This plan would return $300 to that family now at the $13,000 level the honor. Governor, he would have $72 we have $300 at 16,000. He would have a $92 cut. We have $300 at 18,000. We he would give $105 in relief we get $300 at 20,000. He would give $118. We give $300 at 25,000. You would give $154 we get $300 at 30,000 to give $190. We give $300 at 35000. You would give $205 we get 300 at last we get to the real Rich Man part at $50,000 or better offer to the governor's bill. Then you're under our bill. That's not the the class of person who deserves who needs that. I am most concerned about you and I are Urgent propriate action on this bill which to me is favorable action. Senator ashbach Jordy and the normal leaders of the Minnesota Senate Senator Nicholas Coleman and once again Senator Robert Ash box $50,000 a pound of return is going to get $75 back. What if I'm part of the Working Poor and pay $30 in taxes and I got $30 back if I don't pay any taxes with large family anyting? That's what's wrong with this bill. It's not permanent. It's not long-lasting is no indexing. No spending the brackets to the plane giveaway. Thunderball Senator Rodger moles and chairman of Senate Finance. I'm going to try to keep my comments just on the Surplus. And her talk just about the overpayment that the taxpayers of Minnesota have they made to operate state government over the past two years and that represents a significant amount of money. The projections are over 228 million dollars. And if in fact the that's what that comes to pass and and The Economist indicate that it probably will be more. It's my impression that the taxpayers of Minnesota don't particularly like surpluses. And that the that overpayment operate state government ought to be returned to them. Not to be used to finance state government in the next biennium. We talked about fiscal responsibility and ongoing tax relief. I'll tell you what I think is fiscally irresponsible. And that's taking in effect a One-Shot Surplus. 25 million dollars of the surpluses from the school aide Bill cancellations Senator Miriam and Senator Stiller's and all the rest to serve on that school aide Committee of Vindicated that they're going to do something to tighten up so that there won't be cancellations in the future at least not in that significant amount. 23 million dollars of the Surplus comes from a payment that was supposed to be made for a bond sale. That was never sold a One-Shot occurrence. 30 to 40 million dollars of the Surplus comes from a settlement with the federal government on some welfare programs again a one-time settlement. The remainder of it comes from inflation in the taxes that have come in and we all know Governor Queens proposal. And the dfl proposal incorporates into their tax package some sort of inflation proofing. So I guess we could refer to that as a One-Shot occurrence as well set a take a One-Shot Surplus and to use that the building permanent ongoing tax relief I think is being fiscally irresponsible. And what's more political? Send Seth distinguished senator from Ramsey indicated that this was a some sort of a political gimmick. What's more political my friends then? Offering a tax program such as Governor quiz offered. when the results to the taxpayer shows up in election year 1980. This tax bill shows up this year. That's my friends is what I would refer to as a non-political tax the tax measure tax relief measure. Can we afford it? Yes, we can't afford it. We can afford it. If we do the other part of what the taxpayers and the voters of Minnesota said last November not only do they want tax relief, but they want some control over government spending. Governor is not the provided much leadership in that area. I think that we can provide that kind of leadership the two fun these types of programs to fund this rebate and also to provide the sort of ongoing from the tax relief that the people of this State won. And all of those things I think are important but none of them are as important as fulfilling a promise. And we talk about embarrassing the government governor. It's not my intent to embarrass the governor. It's my intent to hold the governor to a promise and when we when he leaned into that television set and those tv ads up in the Red River Valley and he said that not only should we provide tax relief to the people of this state, but we should return the Surplus to the people above and beyond the text. But as a matter of principle and I really believe them. I really believe that he meant what he said and so as a matter of principle, I believe that we ought to allow Governor Qui and opportunity to stand behind that promise. Unless it's a shallow promise. Maybe it's similar to his 10% across-the-board tax cut, which as I understand now, I really didn't mean 10% across-the-board tax cut or maybe it's similar to the ratio of 1 to 15 for students which he didn't disguise or didn't try to a back off of in terms of his support for the NBA proposal prior to the election. But now you saying that people really didn't understand what he meant by his 1 to 15 Ratio, or maybe he meant the same thing with the surface and I'm going to give him the benefit of the doubt in the quote in the paper the other day when he said that if we return the Surplus, we're not going to provide the ongoing tax relief, but that's where we should provide all I think that's probably was a misquote on his part and you really does still believe that we ought to provide that the Surplus be returned to the people because I firmly believe that as a matter of principle the governor ought to have the opportunity to stand up to what Prior to the election that is that the Surplus should go back above and beyond his permanent tax cut. And as far as the house is concerned unless it's been a rash back and something to share with us. I don't think that that ever has been in an influence on this body as to what we are to do. I think we kind of have been somewhat independent through and so unless the senator has has some indications as to what's happening in the house. I think we ought to move ahead with it. This is I think the sound fiscal plan is a sound tax plan. It gives back to the people in the state of Minnesota money. That is nothing more than an overpayment on their part and it certainly it certainly is doing exactly what the governor wanted us to do as a matter of principle. Senator Rodger mole from Aida the fln and chairman of the Senate finance committee. after the the minority leader wants to be recognized. He takes a preferential place in the pecking order Center ashbach. Mr. President members of Senate it is most interesting. Are We Now find the majority group making good on the Promises of the governor I think the governor is fully capable of implementing his promises through his legislation, and I don't think we need any help from legislators to Implement his so-called what you indicators his promises. I think he's perfect cables doing that. I think also. Making it obedient. We're kind of misleading the public. Quease proposal is immediate it goes back to January wanted 79 will be effective and the tables in July 1st of this year. Those of you on the text when you don't know how long it take to get this refund out. You'll know how long and how much money it will cost to do it. The governor's proposal is a fair proposal for NVIDIA. It's less costly and more the benefits will be returned to the people. Senator Carl Junction from Sleepy Eye another independent Republican. I'm sorry that I had to miss the Friday and Monday meetings where this matter was discussed. I want to assure you that I have a legitimate reason I was at the oral surgeons office in Mankato both on Friday. And on Monday. I have a picture here showing a huge she got rich. They still haven't been able to take care of completely, but you have that picture at your desk. Tanner Jensen, I don't know exactly how much I have in the tax committee. I know I am a member of the tax committee. And of course I had no input because I wasn't there but I wouldn't expect you to postpone your tax committee meeting just for that. I guess I don't really know whether we should be discussing the actual parts of the bill here because I think the principal thing is that this is a deliberate deliberative assembly. We're supposed to have committee meeting come out here in the floor and have a final discussion on it. I'm sure that there has been that kind of deliberation in the committee that was necessary for a bill of this moment. Actually, I think you won't realize. This is a retroactive tax bill. increasing individual dependent credits by $75 Maybe this is a good idea. I think the dependent credit now I should know this. I think it's maybe $25 per person 40. It's $40 per person. This would be retroactively increasing the dependent credit for 1977. Buy $75 now if we're going to give it to those people in 1977, why not in 1978 and 1979? That's just one possible facet. That should be considered. Another thing is that this isn't going back to the people proportionately who paid it. It's either strictly an increase in the dependent credit or it's some sort of a an unfair redistribution. Not on the proportion faces. It isn't going back on the basis of need. We can do that on the basis of the circuit breaker. I read in the paper here just the other day that I believe there are 3000 tax refunds that were returned to the department averaging $140 a hundred $39 3000. for lack of address immediately God knows how many people have moved since that 1977 tax return was filed in 1978. So if you if I understand correctly that the refunds are paid out to those people who filed 1977 tax returns in 1978. I'm not going to say any more about the bill except I think that we should on a tax bill on something as big as this we should hear from our constituents. I think I never caught the newspapers unless their favorable but I think we should listen to them. I think we should read them. They're just starting to find out about this thing. Maybe maybe the dfl is afraid of what the response will be from the public and the Press after they find out what this is all about. Maybe that's why you want to put it through the day but for example of my own Guam Daily Journal reprinted an article from the st. James plaindealer. Come on. Now when you come out with these statements about bigger and sooner tax rebates for Minnesota. It's politics again, instead of representation of people of Minnesota want representation not politics, but the politicians can't seem to understand that if the dfl is really wanted to do something for the taxpayers. They could have done so under Governor Rudy perpich has Administration. In the Mankato brass January 31st, in fact area house members are saying the proposal is essentially a good idea and the area is 3 dfl senators. Disassociated themselves from the plan with such statements as quote. I'm not a Taxman another one. I don't have any strong feelings either way and another one. I was not really excited about coming forth with a dfl proposal. I'll finish my quotes. With this little article in this time West article. He says Senator Tim Penny said, he would have preferred to wait before making a formal dfl proposal. He noted the Qui had said in his budget address that he would make other proposals later on then he said I didn't want to do anything precipitous. I'm not running around saying we've got a proposal that's got the pass or we're in bad shape. This is a long session and I have never seen a tax bill go through until the end on quote. All I'm saying is if there may be some Merit increasing and increasing dependence credits buy $75 us Bill bills do increase the dependent credits in the future not retroactively. I do say that we should be deliberating this matter further. I think it should be back in the in the tax committee people. We should be able to compare and then finally come forth with a real good tax bill from the floor of the Minnesota Senate on the building would return much is a surplus in the State Treasury immediately to the taxpayers through a $75 per taxpayer independent to rebate there are forty-seven ti Founders in the Senate to 20 independent Republican. Panda the actual outcome of this is not exactly in doubt. But the Senators are enjoying their debate over there any right now? Here's Senator Tim penny. Gallivan Center Center Mall in regard to principals don't principles mean anything anymore. I would just like and I'm very reluctant to use newspaper articles in quotes on the floor. But since Center Jensen started that I now feel that I can but let's look at the record. Doesn't a commitment May on an important issue like taxes mean anything once you're elected isn't that part of the problem why people have lost faith in their government. That principals don't always mean what they should once you're elected. Here's an article that appeared in the Saint Paul Pioneer Press, September 5th, 1978 during the last campaign for governor and its states in here that Queen also reaffirmed his belief and returning stripless money in the state's budget to the taxpayers who created the syrup was promptly. And in the form of a tax credit on income tax forms, so I'm amazed that there would be members of the Republican party here opposing this principle of keeping a firm pledge that was made to the people of this state during a campaign for governor, and I would be more amazed if we did not see the governor coming out and supporting a pledge he made that people listen to that people reacted to that people voted for him over this issue that you would now back down from those Campland pain pledges. That should mean something once you're elected. The secretary will report the Amendments the page 2 line 20. Senator Ron sielaff the Republican St. Paul is but that's about the quote amounts and insert quote amount. On page two line 21 delete to administer and insert the sum of $522,000 for the cost of administration of ankle on the Amendments. Mr. President. I had the opportunity to deliberate with the tax committee when this bill was passed in the text committee. And at that time we spent about 20 minutes or so on the bill, perhaps a half an hour. We spent money at the rate of about 20 between 10 and 20. 20 million dollars per minute. And one of the things I noticed about this particular tax bill was his first of all, I noticed a distinct lack of enthusiasm by the members of the text committee. And secondly, I noticed the basically what I would consider to be a lack of of thought that went into this bill and the lack of preparation given the magnitude of the money that were talking about is 200 million plus dollars. And I really didn't take me very long to conclude that senator ashbaugh cuz absolutely correct that this is something of a grandstand at something of a media event. And I think that the dfl caucus is attempting to to take some credit for the tax relief that will be forthcoming through the governor's proposal. But beyond those kind of remarks, I'd like to say that that the the bill the bill is really a foolish Bill and I'm laying a foundation for my Amendment. Mr. President. I hope so. Thank you to me during the onset of the McCutcheon. When asked when this money would be your sent out really couldn't say with any kind of certainty. It'll be coming out sometime between the day after the bill passes and perhaps nine months later because it'll take such a long time for the Department of Revenue to gear up and send the money out. Then it also occurred to me that I don't like we proposals where we're going to have some meaningful and permanent tax relief that the The people have been a sort of will commence receiving a benefit in the form of lower withholding as of July 1at 1979. So that the point I'm making is that under the under the bill that's before us probably what will happen is that if the queen proposal was adopted there will be immediate tax relief earlier than it will be under the rebate plant. But the real Crux of the matter. Mr. President, is it cost of administration and a heat of the the hurried manner in which this bill is put together it seems as if the authors of the bill with the proponents of the bill, I want to get this money out with some kind of a statement on it that your legislature cares. They want to get it out so fast that they'll pay anything for it Mr. President the testimony at the at the text committee meeting was it would cost somewhere in the neighborhood of $522,000 just to pay the postage and identify the taxpayers that we're going to send the money to in my opinion. This is a total waste of money in as much as that we could convince. In fact giving a rebate to People by simply luring they're withholding on the first day of July of 1979 and mr. President. The purpose of the of the amendment is that I would like to incorporate as a separate line item appropriation in the bill the amount of administration cost which we will be wasting the taxpayers money in the state by adopting this bill and this present I move the adoption of the amendment on the amendment. Andrew McCutchen against Senator Bill McCutcheon late chief author the bill What I thought were the political parts of it like the address the political issues first because I don't think the longest I would first of all and it's under Jensen if I do apologize for not reading the text committee at your convenience, but I don't know how we can handle that. I was having your apology is accepted that the tax refund that appeared in the paper. There was an effect a number of tax refunds at at not been returned over. Of years and the purpose of that piece of legislation was to permit the tax commissioner to publish the list of those on return checks in the mail in the paper is similar to what the treasure does so that those people who have those over payments coming but received. and that would enhance what we're doing here today in the rebate building that he would also have the authority then to publish those names in order to be assured do as much as we can to ensure that people who have made an overpayment with a fun fact every opportunity receive that The Department of Revenue has indicated that it will take from six to eight weeks from the time. They received the authorization to make payments until the checks are in the mail and not 9 months as senator seal off suggested and that's in two separate meetings that I've had with the Department of Revenue. So it would all that would depend upon when the bill came from the house and when the governor signed it The Proposal that proposed amendment by Senator sieloff really is a radical departure from what we've done in previous tax bills on that boilerplate language and I would not support that and I would urge that we don't support that a minute or than the one that's coming up after this. Senator Senator in the chief author of the bill argument against the amendment proposed by Senator see lots of wood and some money for for the actual cost of three believes. The Department of Revenue will incur in the administering of this bill. I think Dan Olson if you're back in the studio will be returning to you in and just a couple of minutes. I think you've gotten a fairly good idea of what the basic positions of the two sides are on this on this tax rebate ID. It's a little unusual. In fact, it's highly unusual for a major tax bill to come up before the full senate or the Full House for that matter up this early in the legislative session. It's a very simple tax bill is simply would return to the taxpayers the income taxpayers $75 plus $75 for each dependent. The bill is short only a couple of pages generally speaking tax bills are very lengthy. They're complicated and they don't come up until like I said a minute ago the very end of the session. The mentioned a little bit ago Dan the Senate has a majority of the eye fillers. 47 TI Fellers and 20 Independence publicans sounds like on a Voice vote save just a rejected that a minute by the way by Francy law what happens to this bill and gets over to the house though. Dan has is a little unclear. I spoke to her earlier today with the speaker of the house ride Cheryl. I'm called the bill blatantly political ill-conceived and hastily written. He's obviously not very much in favor of it. He thinks that Governor please plan is a much more of a fair idea much more Equitable and the argues in somewhat the same lines as we've heard the senate in the pain of Republicans here this afternoon in the dfl chairman of the house tax committee on the other hand rather likes the rebate idea at least he is not to by any means dismissing it out of hand Sivan also insist that he likes parts of the governor's program and says that they are the house taxes committee will hear the governor's program a week from this coming Tuesday and it will be considering both the governor's plan and the Senate read a plan as soon as he passes. Very carefully in in the weeks ahead of the house tax committee. Wanted to get as much public input on on all of these major text ideas as it. Can we go any farther the debate will continue this afternoon. Now, what do you predict will be the time for a vote on this rebate measure. My crystal ball is never very clear on things like that. And it's particularly cloudy when it comes to predicting won. The Senate will vote on something. I do believe that there are not a great number of amendments at the end of any Republicans are going to be offering and I think it's their intention to keep the the debate relatively brief. However, we've been going out for about 45 minutes with the no indication that they're moving toward of both. So I would you know, if think an hour or two hours from somewhere in that in that area, it's just really really very hard to guess and you will be monitoring the debate for us and I understand you'll be checking back with us later this afternoon on the outcome of the vote. Is that right? We will have we will be returning one. When there's something definite to report gifts, just and by all means very good. Well, thanks Bob for leading us through the Maze of the proposal by Senator William mccutchan of Saint Paul. And thanks to for your coverage of the senate floor debate. Bob Potter NPR's legislative correspondent live from the Minnesota Senate in Saint Paul and that concludes our live coverage as part of midday.