By Don Davis and Danielle Killey
Nearly $730 million more would be available to education and jobs programs under a budget Gov. Mark Dayton proposes for the next two years.
The plan Dayton released Tuesday would increase taxes about $2 billion. The state would raise and spend nearly $38 billion in the two years beginning July 1 under the Dayton plan.
About half of the new money would plug the state deficit, with the other half upping spending in areas such as education and jobs.
The Democratic governor said the budget, if legislators approve, would fulfill one of his key promises. “I made a commitment to increase state (education) support every year: no excuses, no exceptions.”
A better funded education system would help Minnesotans get jobs, he said.
He also said more jobs would be available if lawmakers approve his economic development plan, which provides business loans, tax breaks and other incentives.
Dayton said his combination of tax increases and higher spending is a more balanced approach than Republicans have allowed in the past decade.
“It ends the fiscal games, accounting gimmicks, payment delays and other financial manipulations of the last 10 years,” Dayton said.
Republicans were not happy with what they saw.
House Minority Leader Kurt Daudt, R-Crown, said he thinks the plan will push jobs out of Minnesota and that it is too heavy on new taxes rather than cuts.
“These are things that are not going to help Minnesota’s economy grow,” he said.
Dayton’s fellow Democrats control the Legislature, and generally agree with his ideas.
“This is a bold plan,” Senate Majority Leader Tom Bakk, DFL-Cook, said.
Bakk and other Democratic-Farmer-Laborite leaders would not discuss specifics of the plan.
“I think this budget positions us well for the next generation,” said Assistant Majority Leader Sen. Katie Sieben, DFL-Cottage Grove, specifically citing education funding as a positive piece of the budget.
“This is the best state budget for education the state has seen in decades,” House Speaker Paul Thissen, DFL-Minneapolis, agreed.
Dayton suggests $118 million in new public school funding, an average of $52 per student, and $125 million more for special education.
More money would be spent on early learning and all-day kindergarten, which would be optional for schools across the state.
Public schools would receive $15 billion under the Dayton plan, with the state’s two higher education systems getting nearly $3 billion, $80 million more each.
The House education finance chairman was happy with Dayton’s plan.
“For too many years we’ve failed to make the necessary investments to help our economy and middle class grow,” Rep. Paul Marquart, DFL-Dilworth, said.
Marquart added his voice to other lawmakers who said that Tuesday’s budget proposal is not the end as lawmakers prepare to dig into it beginning today.
University of Minnesota President Eric Kaler called the Dayton plan good news. Among other things, the funding increase would allow the university system to freeze tuition, he said.
The governor’s proposed budget will enable us to invest in research and innovation to fuel the state’s industries where great strength exists,” Kaler said.
Dayton wants to increase payments to cities and counties $120 million to help keep down property taxes.
That is good news, Executive Director Jim Miller of the League of Minnesota Cities said. “It is hard to not at least be pleased.”
However, he added, cities need to wait to see how the money will be divided before knowing how valuable it will be.
An $86.5 million boost in economic development funding should create jobs, Dayton said, but he could not say how many.
Changes Minnesota Gov. Mark Dayton proposes in taxes include:
— Sales tax rate reduction from 6.875 percent to 5.5 percent, but tax more items, including most services, such as haircuts and auto repairs, and clothing items that cost more than $100
— A new income tax rate of 9.85 percent for married couples making more than $250,000, individuals who make more than $150,000
— A drop in the corporate income tax rate from 9.8 percent to 8.4 percent
— A property tax credit of up to $500 for homeowners
— A 94-cent per-pack increase in the cigarette tax
— A two-year freeze on state property taxes for businesses
New spending the governor proposes include:
— $120 million aid for cities and counties
— $86.5 for economic development programs designed to create jobs
— $118 million in school funding, $52 per student
— $125 million for special education programs and $40 million for all-day kindergarten
— $80 million for the state grant program, providing funds for low- and moderate-income college students
— $80 million each to the University of Minnesota and Minnesota State Colleges and Universities
— $10 million more for teacher evaluations and other education programs
— $9 million for English language learning
The governor says his budget will save:
— $1 billion in better managing health care
— By eliminating a “loophole” afforded some corporations
— $890 million by requiring state agencies to absorb inflation costs
Source: Governor’s office