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The Topline: What's in the Minnesota Senate tax bill? • Minnesota Reformer [1]

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Date: 2025-05-12

Welcome to The Topline, a weekly roundup of the big numbers driving the Minnesota news cycle, as well as the smaller ones that you might have missed. This week: what’s in the Senate’s $365 million tax omnibus; a record-high graduation rate; the summer air quality outlook; and tallying the attorney general’s lawsuits against the Trump administration.

What’s in the Senate tax omnibus

Last week the Senate Tax Committee approved an omnibus tax bill with $365 million in new revenue over the next biennium. About $315 million of that figure comes from new taxes, with the remainder coming primarily from the expiration of various tax aids and credits.

A new tax on large social media companies accounts for the lion’s share of the proposed new revenue and would generate $138 million in the next biennium, according to Senate analysts’ estimates.

The bill would also raise the rate of the net investment income tax from 1.0% to 1.5%, generating $74 million. That tax applies to investment income exceeding $1 million.

Another provision would reduce the maximum operating loss deduction in the corporate franchise tax, bringing in another $62 million.

About $40 million in additional revenue would come from reducing aid to local and county governments.

The bill still needs to pass the full Senate and undergo reconciliation with the House tax bill. Republicans, who share control of the Minnesota House, and allied groups oppose higher taxes — since in this case they’re not called “tariffs” — and have been critical of the Senate bill. So it’s unclear how many of these provisions will make it all the way through to the desk of Gov. Tim Walz.

Lawmakers are also eyeing $300 million in cuts to the human services budget as the state attempts to forestall future budget deficits.

High school graduation rate hits new record

The Walz administration and teachers’ groups cheered the release last week of new data showing the statewide high school graduation rate edged to its highest level on record. The rate increased from 83.3% in 2023 to 84.2% in 2024, or nearly a full percentage point. It’s the highest rate on record, and the largest year-over-year increase in a decade.

“The graduation data show increases for students in the American Indian, Asian, Black, Hispanic or Latino and white student groups,” the Minnesota Department of Education noted. “Graduation rates also increased for English learners, students from low-income families, and students receiving special education services.”

The graduation rate among Asian and Hispanic students increased by about 2.5 percentage points, as did the rate among all students eligible for free or reduced-price meals. English learners posted the biggest year-over-year increase at 3.9 percentage points.

Relative to 2020, the graduation rate among Indigenous and Black students increased by roughly 4.5 percentage points.

This aligns with a 2019 Walz goal to raise graduation rates.

Staggering racial disparities remain, however. While nearly 90% of white students graduated, fewer than two thirds of Indigenous pupils did. The rate for Black and Hispanic students is closer to 75%.

“These Minnesota students overcame the disruptions and distractions of a global pandemic and a national racial reckoning after the murder of George Floyd to graduate at the highest rate on record,” said outgoing Education Minnesota president Denise Specht. “It’s remarkable, and a testament to the resilience of the students and the quality of instruction and support they received from their educators and families.”

While the improvement in the graduation rate is welcome, data released at the beginning of the school year shows that student achievement still lags well behind the pre-pandemic levels, and in some cases continues to fall.

Summer ozone levels expected to be slightly above historic averages

Forecasters with the Minnesota Pollution Control Agency expect outdoor ozone levels to be unhealthy for sensitive groups between four and seven days this summer, slightly above average.

The agency also expects 12 to 16 days of wildfire smoke impacts, up from last summer’s forecast of five to seven expected alerts.

MPCA will also begin issuing alerts for PM10, which covers airborne particles larger than those that make up wildfire smoke. It’s typically caused by blowing dust, which is an issue in agricultural areas between fall and spring, when topsoil can get blown off bare fields.

The agency issues regular air quality updates and forecasts on its website.

Keith Ellison has sued the Trump administration 22 times

The Star Tribune recently launched an ongoing tally of Attorney General Keith Ellison’s lawsuits against the Trump administration. The tally so far is 22, most of which were filed in conjunction with the attorneys general of a handful of other states.

The lawsuits cover everything from the administration’s anti-transgender actions to the abrupt cancellation of various types of grant funding to Elon Musk’s allegedly improper influence over the workings of the federal government.

All of the lawsuits are currently open. The tally does not include other legal actions undertaken by Ellison, like filing amicus briefs in other cases challenging administration actions.

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