Senate Democrats to release tax plan Monday to raise $255 million

The state Senate Democratic caucus will release a tax plan Monday based on adjusting the Modified Business Tax to hit mining and larger businesses, a reliable source said today.

The plan would raise the payroll tax to 2 percent on mining, making it commesurate with financial institutions. Every business with a quarterly payroll of more than $62,500 will pay 1.5 percent (it is now 1.17 percent).

The source says the tax changes will result in $255 million over two years. Additional changes from the Economic Forum and other sources could get the plan to $310 million.

Here's how the three-tiered plan was explained to me:

Mining/financials: 2%

Everyone over 62,500: 1.5%

Nobody gets penalized if they go slightly over 62,500, they get hit with a smaller rate for the difference between 62,500 and what their actual payroll to a certain threshold is. For example, if your payroll is 62,501 you pay for that 1 dollar.  So essentially, only the big folks will see a change are the bigger payroll companies, for everyone else everything stays the same.

So, finally, we have a plan. Can the Democrats get enough Republican votes to pass it? Is the Assembly on board? Will it get the teachers to back off the margins tax? Will the Senate Democrats introduce a corporate income tax ballot plan soon?

We'll see. But this is the Fund Education Now plan only. I still expect to see some long-term idea floated before June 3.