DFL and Republican lawmakers had very different reactions to Gov. Mark Dayton’s proposed $37 billion budget plan.
In a press conference, Dayton outlined his plan to address the state’s projected $6.2 billion budget shortfall through mostly tax increases. His proposal would protect cities, counties and school districts from budget cuts by raising taxes on the wealthiest Minnesotans.
“There will be no state-imposed property tax increases through cuts to schools and local governments, and the only tax increases will fall upon the wealthiest citizens,” Dayton said.
The governor’s plan would cancel a scheduled payback of $1.5 billion in delayed payments to K-12 school districts. It would also cut $950 million in forecasted spending: $680 million from health and human services, $171 million from higher education and $84 million from all other areas.
A new, fourth income tax tier of 10.95 percent would be established for individuals making more than $100,000 a year and married couples making more than $200,000 in adjusted gross income. A temporary 3 percent surtax on Minnesotans earning more than $500,000 a year would expire at the end of the biennium. Other revenue increases include:
- a new state property tax on home values exceeding $1 million;
- closing various tax loopholes; and
- a surcharge on health care providers.
Republicans leaders wasted no time in criticizing Dayton’s budget plan. House Speaker Kurt Zellers (R-Maple Grove) called it “feeble and pathetic,” and said the tax increases Dayton proposed would send job providers fleeing to other states.
“To the employers and employees across the great state of Minnesota: don’t worry, we’re here for you. We are not going to let Mark Dayton tax your job out of our state,” he said.
Senate Majority Leader Amy Koch (R-Buffalo) said Dayton’s proposed tax hike would give Minnesota the highest income tax rate in the nation, and that many small businesses would be included in the new income tax tier. She said Republicans would offer a budget plan that limits spending to within the $32.4 billion in revenues projected in the next budget cycle.
DFL leaders hailed the governor’s plan as a “fair and progressive” approach to the state’s budget challenges, and said it’s fair to ask the wealthy to pay more taxes to protect essential state services.
“More and more money has been coming out of middle class pockets with rising property taxes, tuition and fees … while Republicans are busy finding a way to protect the richest Minnesotans from sharing in this budget solution,” said House Minority Leader Paul Thissen (DFL-Mpls).