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An end to business property taxes in Minnesota?

ST. PAUL - Minnesota would phase out state business property taxes and give other groups tax cuts as well if a Senate plan announced Wednesday is approved.

The proposal would give more than $102 million in tax cuts next year, with more planned in the future, that would be offset by trimming state government spending and using some of the budget reserve funds.

"We want Minnesota's tax climate to be competitive," bill author Sen. Julianne Ortman, R-Chanhassen, said.

The Senate tax committee plans to take public testimony, discuss amendments and vote on the bill Thursday.

The House is to debate its own tax proposal, which also features the business property tax elimination, tonight. The House proposal would trim the renters' property tax refund program, while the Senate measure does not.

Democratic Gov. Mark Dayton has criticized the Republican plans.

To phase out the state's business property tax, the Senate GOP plan would reduce the taxes to roughly the 2010 levels through 2016, and then drop each year until they are eliminated by 2026.

"It's becoming a burden to Minnesota businesses," Ortman, also chairwoman of the Senate Taxes Committee, said of the business property tax.

She also called for a simplification of the tax code in general.

The proposal would give married couples a tax break in 2012 and give other credits to members of the military and veterans.

The plan also would freeze local government aid at 2010 levels. Sen. John Howe, R-Red Wing, suggested looking into not limiting funds for cities with fewer than 5,000 people.

Objections to the tax bill surfaced quickly.

"There's some good stuff in here and some bad stuff in here, but you're paying for it with money from the reserves," Sen. Rod Skoe, DFL-Clearbrook, said. "I'm astounded."

Other senators said the tax breaks should focus more on middle-class Minnesotans. Ortman said the cuts will help businesses create jobs.

Danielle Nordine reports for Forum Communications Co.