Mortgage deduction on taxes would get a review from IP’s Horner as Minn. governor

Horner wants cap on Minn. mortgage deduction

ST. PAUL, Minn. — As Minnesota governor, Independence Party candidate Tom Horner says he would “take a hard look” at tax exemptions and deductions, including mortgage interest for homeowners.

Horner said Thursday he favors capping the deduction homeowners can claim, although he didn’t set an amount.

“I don’t think we ought to eliminate the mortgage deduction. I don’t think that we ought to exclude second homes,” Horner said. “But I do think it is reasonable to say that at a certain level Minnesotans shouldn’t be subsidizing total investment in mortgages.”

There are some limits in place now: State law lets Minnesota taxpayers deduct on interest paid on loans of up to $1 million toward primary or secondary homes.

Horner, a former public relations executive, addressed the deduction issue when asked about solving Minnesota’s budget deficit. He was laying out a six-part economic development proposal that is a mix of new spending and tax breaks.

The mortgage deduction reduces state income taxes for more than 700,000 taxpayers each year, according to state figures. The exemption costs the state more than $400 million a year.

The Horner jobs plan includes boosting state spending on university research in hopes of entrepreneurial spinoffs in the biosciences and other emerging industries. He said he would lift the sales tax on capital equipment bought by businesses and work to handle permit requirements within six months.

The proposal also would duplicate an Iowa program that diverts some withholding taxes to vocational training programs for companies that add jobs. Horner repeated a previous call for a constitutional amendment that would let the state borrow for technology upgrades, such as expanding broadband Internet networks in the state.

Horner faces several other IP candidates, including publisher Rob Hahn, in an Aug. 10 primary.