Dayton Vetoes Tax Bill With Business Breaks

Democratic Gov. Mark Dayton vetoed a smaller tax-relief bill than Republicans wanted, saying Monday that it would cost $119 million over three years, mostly to cut business taxes.

“It ignored my requirement that any future spending must be paid for and avoid adding to the next biennium’s projected deficit” of $1.1 billion, Dayton said.

The governor also said the bill is not balanced because it would give “significant business tax reductions and virtually no tax relief for anyone else.”

“There is no question that Minnesota businesses have been hit hard by property tax increases,” Dayton said. “But so have everyone else.”

Republican reaction was immediate on social networks, especially given the fact that hours earlier Dayton signed a bill, amid much hoopla, for a $975 million Vikings stadium.

“Dayton provides prop tax and sales tax relief for Vikes but denies it for all other MN businesses,” tweeted Senate Tax Chairwoman Julianne Ortman, R-Chanhassen.

Ortman said part of the bill Dayton erased contained tax breaks meant to help Mall of America to expand. That cost 10,000 jobs, the senator said.

House Republican spokeswoman Jodi Boyne said Dayton “turned his back on every business” after signing the stadium bill, which helped one business.

House Tax Chairman Greg Davids, R-Preston, had said Republicans looked over Dayton’s veto letter of the larger bill a month ago and tried to craft one he would like. But Dayton was not involved in writing the bill.

The measure would have frozen a statewide business property tax and made several other changes, mostly helping businesses.

Dayton praised some provisions in the bill, such as one to give tax credits to businesses that hire veterans and another to encourage business investment.

The governor signed another tax bill, “despite my serious reservations.” He said he is concerned about Local Government Aid changes in the bill.

Dayton said some cities may receive more aid than planned, while others lose. Republicans said small cities would be spared cuts, and other cities’ state payments would be frozen.

“Despite my concerns, I am persuaded to sign the bill because of the $4.1 million of property tax relief it provides to homeowners, who experience increases greater than 12 percent,” Dayton said.