Column by Dan Sparks, State Senator

Last week, the legislature passed a Tax Bill that resembled the bill the Governor vetoed in 2007. This time, though, the Governor signed the bill. That means new deductions may be available to some Minnesota taxpayers filing their 2007 taxes before the April 15 deadline.

If you&8217;ve already filed your taxes, don&8217;t worry &045; you can file an amendment to your tax return to claim any additional subtractions you may be eligible for. If you haven&8217;t filed your taxes, the Minnesota Department of Revenue is working on updating its paperwork so you&8217;ll have one less step when you do file your information this spring.

The tax bill that passed updated Minnesota law to include changes the federal government has made to tax laws between May 18, 2006, and Feb. 13, 2008, and it updated the federal definition of taxable income effective for tax year 2007 and following years. The only portions of these bills that Minnesota did not conform to, because of cost constraints, are: the deduction for higher education tuition expenses; the deduction for teacher classroom expenses; the enhanced deduction for corporate donations of computer equipment; the increase in section 179 expensing; and the allowance of 50 percent bonus depreciation for 2008-2009.

A full list of new deductions is available online at www.taxes.state.mn.us or by calling the tax help line at (800) 652-9094. Some of the most common updates that would affect Minnesotans&8217; taxable income include a new subtraction for mortgage insurance premiums paid in 2007; a new allowance for persons 70.5 years of age or older to make charitable contributions of up to $100,000 from their IRAs without counting it as taxable income; a new option to include combat pay in earned income for purposes of claiming the federal Earned Income Tax Credit; and a one-time rollover of health reimbursement and flexible spending accounts to health savings accounts.

Also last week, the legislature passed a bonding bill, which included the local projects like Edgewater Park cleanup that I&8217;ve listed here before. Currently, a conference committee is working out differences between the House and Senate bills before we send it to the Governor to sign. The sooner we can get a bonding bill passed, the sooner people can be put to work on these construction and improvement projects throughout the state. In a struggling economy, we certainly hope the governor will come on board and move this bill as soon as possible.

From this point forward, the budget will be the foremost concern for legislative committees. The Governor released his budget recommendations on March 7 to account for the $935 million budget deficit that was revealed at the end of February. His budget includes utilizing the state&8217;s reserve fund, closing corporate tax loopholes to collect about $102 million, and imposing cuts to several programs and agencies.

The Legislature is prepared to work with the governor; we understand what a massive challenge closing this budget gap will be, and I certainly understand that bipartisan cooperation is the only way we&8217;re going to get this done. However, it&8217;s also important to ensure we&8217;re not doing anything irresponsible.

For instance, the governor proposes a $162 million cut to higher education budgets over the next three years. In Pawlenty&8217;s first term, tuition and fees in Minnesota increased by more than 40 percent, and these newly proposed cuts will only cause that number to skyrocket higher. Just this week, a state report revealed that the net cost of a public college education in Minnesota is nearly twice the national average.

Further cutting higher education budgets means strapping students with additional debt, limiting the opportunities many students have to attend college at all, and putting additional pressure on middle-class families who are just trying to provide their children with a quality education. Cutting higher education might help close the budget gap, but it will have long-term negative effects on our state&8217;s workforce and economic health.

We need to closely analyze the full effects of this and other proposals before we move forward. That&8217;s what committees will be doing with all budget areas between now and the end of the month. Budget bills need to be out of committee by March 28, and then negotiations will begin with the goal of ending the legislative session on or before May 19.

Dan Sparks, DFL-Austin, is the state senator for District 27. His column appears every other Sunday during the legislative session.