By Don Davis
Gov. Mark Dayton told legislators tonight that state leaders must attack Minnesota’s problems head on.
“We can choose, as others in our positions have before us, to ignore these growing problems, avoid fixing them and hope they don’t crash down upon us while we’re in office,” Dayton said in remarks prepares for his third State of the State speech. “Or we can lead. That is what the people of Minnesota elected us to do.”
Dayton’s speech centered on promoting his higher-taxes and higher spending budget proposal. It came in front of a Legislature with a Republican minority that does not like what he proposes and a Democratic majority that has yet to offer its full support.
Even though Dayton says only the 2 percent highest earning Minnesotans would be taxed more, lawmakers have plenty of questions about how his proposal will affect the middle class.
The governor promoted his call to raise taxes on the rich, charge sales taxes on services and some goods that have not been taxed and to lower the sales tax rate.
“In the decade after Minnesota’s income tax reductions, our economy fared worse than the nation and most other states,” he said. “And at both the federal and state level, big tax cuts followed by serious recessions produced large budget deficits, which threaten our current fiscal strength and future economic prosperity.”
An advance copy of some of his speech did not show new initiatives. Fiscal matters were his focus.
Dayton said the state has fixed most of its fiscal woes, but more is needed.
His budget plan would plug a $1.1 billion deficit, but the state still would owe schools that amount.
“My budget … would lift us out of this miserable deficit-to-deficit cycle,” he said.
One non-money matter he brought up was what he sees as a need to allow gay marriages. Even though voters defeated a constitutional amendment to ban gay marriages last November, state law still does not allow same-sex couples to wed.
“I want Minnesota to be a state which affirms that freedom for one means freedom for everyone, and where no one is told that it is illegal to marry the person you love,” he said.
Dayton’s proposed two-year budget would spend nearly $38 billion and bring in more than $3 billion in new taxes.
The plan released last month includes more spending for education and jobs programs while erasing a $1.1 billion state deficit. Dayton also proposes a series of tax changes.
Public schools would get more general funding and for special education programs. More money would be spent on early learning programs and on optional all-day kindergarten as well.
About $1.1 billion would be raised from higher income taxes for couples making more than $250,000 in annual taxable income and individuals earning more than $150,000.
The plan also would reduce the sales tax rate from 6.875 percent to 5.5 percent but expand what is taxed to include most services, such as haircuts and auto repairs and those businesses provide to other businesses. Clothing items that cost more than $100 also would be taxed.
Dayton’s plan also would give most homeowners a $500 property tax rebate.
The state Constitution says that a “governor shall communicate by message to each session of the Legislature information touching the state and country.” That has turned into the State of the State tradition.
Most governors have done like Dayton, and delivered the speech in the Minnesota House chamber to a joint House and Senate session. However, some governors, such as Tim Pawlenty, took the speech on the road. And Jesse Venture once delivered it without an audience from his official residence.