Budget Outline Released, With Details To Come

Thissen and other leaders

By Don Davis


Minnesota Democratic leaders plan to raise Minnesotans’ taxes $2 billion in the next two years, with much of the money going for education.


The governor and legislative leaders announced this afternoon, eight days before lawmakers must adjourn for the year, that they have an outline for how to spend $38 billion in the next two years and how to raise money they need.


“It’s too early to call a victory lap,” House Speaker Paul Thissen, DFL-Minneapolis, said, because most of the details are being left to House-Senate budget and tax conference committees that are to negotiate final details.


With Democrats controlling the House, Senate and governor’s office, three people are in charge of making most decisions about what will be presented to 201 lawmakers. Republicans have not been involved in budget talks.


Thissen, Gov. Mark Dayton and Senate Majority Leader Tom Bakk of Cook said they agreed on spending targets and will give conference committees a few other guidelines, such as:


— The sales tax would not rise on consumer goods, including clothing, but businesses could pay sales tax on goods sold to other businesses.


— Income taxes would go up on people in the top 2 percent of Minnesota earners, couples with $250,000 or more taxable income.


— An income tax surcharge would be added for Minnesota’s richest of the rich, with proceeds going to help repay money the state has borrowed from school districts.


— Cigarette taxes would rise.


— Some business tax breaks would disappear.


— All-day kindergarten would be funded.


— The state would spend $400 million in property tax relief, such as by increasing aid sent to local governments.


The size of tax increases and other details of the budget remain undecided.


Bakk said the budget outline will make sure two Minnesota priorities are met: more money for education and property tax relief.


The three Democrats said middle income Minnesotans would not pay more taxes other than for cigarettes. But when reporters pushed him on the subject, Dayton said that some of the business taxes could trickle down to consumers in higher prices.


Thissen said legislative pay could be raised under the budget, but the leaders did not make that decision. There also was no decision on whether to raise the gasoline tax, as the Senate voted last week.


An $800 million public works funding bill, to be financed by the state selling bonds, was included in the budget framework.


House Minority Leader Kurt Daudt, R-Crown, said Republicans are not interested in that large of a bonding bill. Many Republicans have said they support work on the Capitol building, but little else this year.


Daudt and Senate Minority Leader David Hann, R-Eden Prairie, said that when all Democratic-Farmer-Labor taxes are added up they could approach $3 billion in the next two-year budget cycle.


If Democrats vote together, Republicans do not have the votes to stop any spending or tax bill other than for bonding.