The Ways and Means Committee took a first look at Tax Conformity and Pensions as well as heard the MNLARS fix bill this week.
Chair Jim Knoblach said that he wanted the Committee to get familiar with the Tax Conformity and Pensions, so the committee heard from the House Non-Partisan Tax Research staff and the Pension Commission staff.
On tax conformity, a lot of questions centered on the timing of bills. There are so many issues if MN doesn’t do conformity this year for 2018, there will be a lot of problems. Plus, the less lead time the software companies and tax preparers have, the worse it gets. They need to pass a bill by the end of this session or in a special session immediately following the regular session so that the law is set by June. Then the Department of Revenue can make create documentation and instructions for the Fall.
Legislators have reiterated the idea of "first do no harm" to keep Minnesota Taxpayers from being worse off than they were before the reform. But Tax researcher Joel Michael said that even if they make offsetting changes so that there are no net tax increases. There will still be winners and losers.
On Pensions, disagreement between the Governor and the legislature have held back needed changes. The Governor hasn't wanted to change contributions by workers or increases for retirees. But there are other changes, like an overvalued rate of return assumption and other items that have contributed to seriously underfunding the Pensions.
An interesting moment came when Rep. Liebling asked about legislator pensions-- and found out that legislators' per diem is counted as salary in terms of the employer match in their defined contribution plan.