Angel tax credit just $10 million short of finish line

For all of her fierce opposition to angel tax credits, Rep. Ann Lenczewski (D-Bloomington) now has a more pressing issue to focus on: how to pay for them.

Legislative sources say the question has moved beyond passing the bill to financing it. By one estimate, the credit enjoys the support of 100 lawmakers in the 136-member Minnesota House. But like anything else in Minnesota politics, it ain’t over till is over.

Judging from Gov. Tim Pawlenty’s veto of a bill to save a state health insurance program for the poor, money (or the lack of it) is a touchy subject these days. Bipartisan support for the credits is nice but still doesn’t change the fact that St. Paul needs to shake some coins out of the proverbial cushion to fund the bill.

One idea that attracted considerable attention wound up a dud. The plan was to align the state’s tax rate on real estate investment funds with the higher federal tax rate. (I say “align” because “tax increase” is a non-starter these days.) As it turns out, the move would only net the state around $600,000 a year, not even a tenth what the bill would require.

So now legislative leaders and Revenue Commissioner Ward Einess are kicking around five or six other ideas, most of them focusing on tweaking the tax code, either scaling back and/or eliminating other tax credits.

As chair of the House Tax Committee, maybe Lenczewski has some ideas.

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