ST. PAUL, Minn. (AP) — Gov. Mark Dayton delivered an unrelenting pro-tax sermon to a decidedly tax-wary crowd Thursday night, telling a Minnesota Chamber of Commerce dinner that there is no good way out of the state’s budget mess.
“Anyone who thinks this session is going to be easy and painless, please share your magic potion with the rest of us,” the new Democratic governor told the 1,500 business leaders in a St. Paul convention center ballroom. It was a room full of people who fought to keep him from office in the fall campaign.
Business groups are nervous about Dayton’s keystone proposal for fixing Minnesota’s budget problems: Bumping up income taxes on many people reporting six figure incomes. Some independent businesses file their taxes on personal income forms, meaning they could get hit. Republicans, who control the Legislature, say they won’t pass it.
Minnesota’s projected budget deficit is pegged at $6.2 billion, although Republicans argue that it’s a product of rapidly rising spending obligations that need to be reeled in.
Dayton said past budget repairs have only pushed the problem to local leaders, forcing up property taxes. He said he won’t let that happen on his watch.
While stern in his tax call, Dayton sought to extend a hand, asking for input for cutting costs and delivering government services more efficiently. He stressed that education of the state’s future work force, size of the business customer base and the safety of communities depend on a balanced fix.
Dayton imparted a business lesson he learned from his father, who helped build the department store chain that resulted in Target.
“A company’s business did better when its customers are doing better,” he said. “Minnesota’s businesses do better when the people of Minnesota are doing better.”
The annual, start-of-the-year dinner had a far different feel than the last eight, when Republican Gov. Tim Pawlenty was viewed as a steadfast business ally who swatted back any tax hike that came his way.
The room was mostly silent as Dayton spoke, with the only noise being forks clinking on dinner plates. He got polite applause and a slow-to-happen standing ovation at the end.
Chamber president David Olson said both sides know where each other stand — and neither is ready to budge when it comes to taxes.
“I haven’t run into too many business people who say, `Now is the time to raise my taxes.’ They’re cutting health care benefits, they’re cutting jobs, they’re reducing or eliminating their contributions to 401(k)s, they’re trying to survive,” Olson said.
Dayton came under heavy business group fire during the governor’s race. One business-financed campaign group, led by Olson, ran humorous ads with crying children and making bumbling moves on a football field while a narrator said Dayton would “hurt Minnesota’s economy.”
“Feel surprised? A bit frustrated? Scared? That’s how Minnesotans feel when they hear Mark Dayton’s bad ideas,” the ad said. Other ads by independent groups were harder hitting.
Dayton used the opposition efforts as a punch line to break the ice.
“One of the great features of our democracy is you and some of your friends and allies can spend $3.5 million to defeat me in an election and then when it’s over, invite me for dinner,” he joked.
Dayton made lunchtime remarks to a private session of the Minnesota Business Partnership, an exclusive group of chief executives of large companies or top representatives of corporations headquartered outside the state. The leader of the partnership was involved in the anti-Dayton campaign efforts.
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