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DAKOTA COUNTY TRIBUNE BUSINESS WEEKLY February 24, 2011

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Capitol Commerce

Photo by T.W. Budig

Photo by T.W. Budig

On Feb. 15, Democratic Gov. Mark Dayton presented his proposed state budget, one Republican leaders blasted Gov. Mark Dayton’s budget proposal as “epic” in its taxation, promising money to education, no local government aid cuts, but containing multiple tax and indicated that the governor’s budget approach runs against their fundamental prinincreases for wealthier Minnesotans. ciples. Senate Majority Leader Amy Koch, R-Buffalo, listens while House Speaker Kurt Zellers, R-Maple Grove, speaks at an early afternoon press conference.

Dayton pushes for tax increase Governor says budget proposal won’t raise taxes for 95 percent of Minnesotans by T.W. Budig ECM CAPITOL REPORTER

Capitol Roundup

Minnesotans would see no tax increase at all under the governor’s proposal, according to the administration. Dayton does not believe, he indicated, that having the highest tax rate in the nation would cause wealthy Minnesotans to flee the state. “I think the wealthiest people in the state are better than that,” Dayton said. Republican legislative leaders blasted Dayton’s proposed budget as extremist. House Speaker Kurt Zellers, R-Maple Grove, styled the tax increases it contains as “epic” in scope. Assistant Senate Majority Leader Geoff Michel, R-Edina, did not want to proclaim the Dayton budget dead-on-arrival, he explained. “(But) I don’t think it has much of a heartbeat,” he said. Republican leaders indicated that while they were willing to compromise within the framework of a $32 billion general fund state budget — Dayton’s proposed general funding spending is about $5 billion more — they strongly suggested tax increases were unacceptable. Zellers spoke of upholding their “fundamental principles.” Even so, Dayton indicated that a budget solution will be reached during the regular legislative session,

adding that a special session was not an option. Democrats spoke favorably of Dayton’s budget proposal. “I think he delivered on what he said,” Senate Minority Leader Tom Bakk, DFL-Cook, said of Dayton making good on his campaign promises. Bakk and House Minority Leader Paul Thissen, DFL-Minneapolis, would not flatly state that they supported the governor’s proposal. The Democrats spoke of the need to study it further. While Dayton says his budget reflects about a 7.5 percent biannual growth in spending, Republicans charge it’s actually a multiple higher when federal stimulus dollars from last session are factored out.

Education funding In the area of education, Dayton proposes a gradual buy-back of the more than $1 billion K-12 funding shift crafted last session —

buy-back would begin in 2014. Dayton slates about $52 million in new money toward K-12 education — his budget provides funding for optional all-day kindergarten, among other goals. Dayton Education Commissioner Brenda Cassellius called it a “proven fallacy” that education can be bettered without additional resources. Dayton’s budget proposes cutting higher education funding by about 6 percent, but administration officials argued the impact on tuition should be minimal.

LGA, health care Dayton proposes no reductions to the projected growth in LGA — he argues the proposed LGA “freeze” in the Republican budget bill he vetoed last week would have increased the property tax burden by more than $425 million. Republicans counter that it’s insulting to local government officials to assume their response to LGA reductions would be to automatically tax more. In human services, the Dayton Administration

seeks to protect the core safety net for those most vulnerable — health care coverage is maintained for all but 7,200 adults currently on public health care programs. Dayton proposes increasing the Medical Assistance surcharge to health care providers to net an additional $627 million. He proposes cutting nursing facility rates by 2 percent, home- and community-based service rates by more than 4 percent. The governor’s human service proposal seeks to “jump-start” Minnesota’s Health Benefits Exchange by leveraging federal dollars. Health and human services spending accounts for about 30 percent of the Dayton’s general fund budget, 40 percent of all state expenditures in the proposed two-year budget.

employee layoffs, but offered no solid numbers on the number of actual layoffs versus positions eliminated through attrition. In the area of veterans affairs, Dayton’s budget increases funding Minnesota National Guard tuition reimbursements and higher education veterans program. It includes funds for an adult day care facility at the Minneapolis Veterans Home. Dayton makes about $1 billion in permanent spending cuts overall. “I have always said that a budget is about values and priorities, as well as dollars and cents,” he said. Dayton said he realized that the final state budget worked out between himself and the Republicancontrolled Legislature will likely look significantly different than the budget he was proposing. Employee cuts The governor and lawDayton’s budget propos- makers are confronting al calls for about a 6 percent about a projected $6 billion reductions in the number of state budget deficit. state employee positions — about 800 in total. T.W. Budig is at tim.budig@ The governor indicated ecm-inc.com. there would likely be state

 

Democratic Gov. Mark Dayton presented on Feb. 15 his proposed 2012-13 state budget — one that he himself isn’t thrilled with — calling it a tough budget for hard times. “I’m critical of my budget. It’s not the budget I would have presented had I inherited a responsible financial situation from my predecessor — I did not,” Dayton said referring to former Republican governor Tim Pawlenty. “(But) I’m not willing to make barbaric cuts in the essential services that affect people’s lives,” said Dayton. Those who want to cut deeper can explain why they want to hurt to the middle-class while sparing the wealthy, he explained. While Dayton’s budget finds more money for education, proposes no cuts to local government aid, it envisions trimming about 800 state employee positions and includes some $2.9 billion in tax increases on the wealthy. These include a fourthtier income tax, a threeyear temporary surcharge on incomes over $500,000 — Dayton gives his word it will be temporary — plus a property tax increase on homes valued over $1 million. Dayton argues his tax approach corrects the regressive nature of Minnesota taxes — lower income people paying a greater proportion of their income in taxes than the rich. Ninety-five percent of

To find out the latest news in Minnesota government, go online to ECM Capitol Roundup at www.HometownSource.com.

 

2-24-11 - Dakota County Tribune Business Weekly  

2-24-11 - Dakota County Tribune Business Weekly: A weekly business news, information and communication paper serving the southern Twin Citie...