How Will Gov. Dayton Solve Minnesota’s $6.2B Deficit?
ST. PAUL (WCCO/AP) – Gov. Mark Dayton will unveil his $6.2 billion budget solution Tuesday, and the DFL governor is already running into resistance from Republicans, who control Minnesota’s House and Senate.
Dayton, who campaigned on raising income taxes on the highest earning Minnesotans, will propose a mix of income tax hikes, budget cuts and borrowing to erase the record deficit.
Republican leaders say it’s unacceptable, historic and “frightening.”
“My expectation will be that this will be the largest single tax increase that we’ve ever seen in St Paul,” said State Sen. Geoff Michel (R-Edina), the GOP Deputy Majority Leader. “I think he’s going to raise taxes even higher than he campaigned on.”
Senior Dayton administration officials say the governor will propose income tax hikes on the top 5 percent of Minnesota earners, which include: Singles making $150,000 after all deductions and couples earning $200,000 after all deductions.
Dayton will argue a tax hike at those levels result in an additional tax bill of about $131 a year.
He will also reprise another campaign promise: Creating a new, higher property tax rate on the value of a home above $1 million.
Administration officials say Dayton budget will also keep his promise to increase school aid, but not by much.
And he will delay for another two years payback to schools of the $1.8 billion former Gov. Tim Pawlenty and the legislature borrowed last year to balance the budget.
Dayton’s budget won’t include deep cuts to cities and counties or public workers, which he will argue will hold down future property tax hikes.
According to the Associated Press, Dayton’s plan would have Minnesota spend almost $3.5 billion on several local aid and tax credit programs. About $1.5 billion of that goes to cities and counties; hundreds of millions of dollars more would go to property owners or renters and other money would feed into pension programs as scheduled.
The leader of the state’s 43,000 member public worker union said last week there are no good options.
“We can tax workers out of their homes, or we can tax the rich,” said Eliot Seide, executive director of AFSCME Council 5. “We can close libraries and parks, and lose police and fire protection, or we can tax the rich.”