Budget Bills Take Center Stage At Minn. Capitol

ST. PAUL, Minn. (AP) — The Minnesota House of Representatives voted Monday to cut state income and property taxes on businesses while slashing aid to several large cities, fulfilling key Republican priorities and setting the table for a conflict with Democratic Gov. Mark Dayton.

The House approved a package of tax changes on a 73-59 vote that fell mostly along party lines. Republicans who sponsored House File 42, which would cut state spending by $550 million over two years, said it’s needed to help close the projected $5 billion state deficit while freeing more money in the private sector to encourage job growth.

House Democrats said the tax changes in the bill favor the wealthy and big corporations at the expense of property taxpayers and renters, seniors and the disabled. While not able to block the Republican bill, Democrats have a key ally in Dayton, whose administration estimated the bill would force more than $1 billion in local property tax increases and reduced property tax relief in the next three years.

The passage of the House tax bill was the first major volley in a week of planned votes on pieces of the GOP budget solution. But even as the floor debates were getting under way, Dayton warned that he would not sign individual budget bills until he and Republican legislative leaders reach an overall deal on state tax and spending levels for the two-year period that starts July 1.

“I will not favorably consider a single budget bill without knowing its relationship to a complete and balanced budget solution,” Dayton wrote to top lawmakers.

That’s the easier said than done part. As the debate over the tax bill showed, Republican and Democratic lawmakers envision widely different approaches to balancing the state budget. In contrast to the GOP approach, Dayton wants a mix of some spending reductions and an income tax hike on the state’s highest earners.

“We’ve got one side of the aisle that wants to grow government, and one side of the aisle that’s going to be the big kids in the room, and say, `No, we’re going to hold down our spending,”‘ said Rep. Steve Gottwalt, R-St. Cloud.

Under the bill, income tax rates in the lowest two tax brackets would be reduced, providing $221 million in tax relief over two years. Because those in the top tax bracket pay a portion of their taxes based on the lower two rates, they would benefit from the cuts, too.

Rep. Greg Davids, the Republican chairman of the House Taxes Committee, said low- and middle-income taxpayers would get the most relief proportionately in terms of their incomes. A Department of Revenue analysis showed a $12 yearly tax cut for a family earning less than $30,000 a year compared with $206 for those making more than $250,000 a year.

Such savings would easily be offset by property tax increases, Democrats said, with local governments under pressure to make up for cuts to state aid and other programs. It’s a pattern, Democrats said, that was established under former Gov. Tim Pawlenty and now championed by Republican legislative majorities.

“Tell me, tell me where former Gov. Pawlenty created jobs and I’ll sit down and shut up,” said Rep. Tom Rukavina, DFL-Virginia. “Cut for the rich, make the middle class pay and no proof there’s one job created for this entire state.”

Rep. Keith Downey, R-Edina, said a weak national economy is to blame for lack of new jobs under Pawlenty, and he pointed out that Minnesota’s unemployment rate still compares favorably to the national rate.

Republicans said nothing in the bill would force city and county officials to raise property taxes. “Trust your local governments. They do amazing things with what they receive,” said Davids, R-Preston.

Under the House plan, state aid payments to Minneapolis, St. Paul and Duluth would be reduced by $250 million in the next two years, and eliminated entirely by 2014. Republicans say they singled out those cities because they get the largest amounts of state aid under a formula accounting for tax capacity and needs, but Democrats point out those areas are traditionally Democratic strongholds.

But Rep. Kerry Gauthier, DFL-Duluth, said his city has taken drastic steps in recent years to keep up with declines in state government aid.

“You will be responsible for the 20 percent police reduction. You will be responsible for the 20 percent fire reduction,” Gauthier said. “Those potholes we all hate — when you break your axel, it’s because we won’t be able to afford anymore to fix it.”

The House GOP also reduces property tax refunds for renters. About half of the 38,000 recipients of the credit earn less than $20,000 a year, Democrats said. But Republicans accused Democrats of lacking the willpower to support any move to control state spending.

“What we’re embarking on here today is a whole week long of hearing from the Democrats how they absolutely cannot do anything but fully fund every program, starting with local government aid,” said Rep. Linda Runbeck, R-Circle Pines. “We’ll hear hysterics, we’ll hear awful it is to do anything but fully fund all these programs.”

A Senate tax bill, due for a vote later this week, does not include the income tax cuts and spreads local government aid cuts more widely among the state’s cities. The Senate bill, which would cut spending by $580 million, extends more property tax relief to businesses by phasing out the state property tax on businesses entirely over the next dozen years.

Earlier Monday, the Senate passed an agriculture finance bill with a few Democrats joining all Republicans in support. There was no such bipartisanship for or a jobs and economic development spending plan that cleared the chamber on a party-line vote.

The House was also debating a transportation funding measure later Monday night.

Transportation Commissioner Tom Sorel said the level of cuts could put federal transportation dollars at risk, while Metropolitan Council Chairwoman Susan Haigh predicted steep fare increases and deep service cuts to Twin Cities transit service.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Tom Jones

    Republicthug action is now coming to the floor of the MN Senate. Now we will see what bullying really looks like.

  • Gordon

    Republican plan is to phase out aid to cities that vote Democratic and not to others.
    Senator Gazelka was on TPT. He was unaware that the workforce for the state was demographically more educated that the workforce at large. How can these people run the state when they have no clue what the state is doing?

    • Indigo

      The rest of the state does not need to fund programs and payroll for cities that can’t balance their own budget. It just happens that those cities are demacratic, who would have thunk.

      • Gordon

        Plenty of other cities, know before you shoot your fingers off on the computer. All but about 10% of the cities receive some funding.

      • northstar64

        One of the larger recipiebnts of local government aid is St Cloud, hardly Democratic. LGA was supposed to help cities that had extra demands from serving MN at large (Mankato,, St Cloud, Duluth, Mpls, St Paul).

        Guess anyone against LGA can’t gripe about panhandlers or challengs in North. That’s where the LGA money goes – cops, road, etc.

        • Christopher

          The sweeping tax cut bill ndrtoiuced Thursday night by Senate Majority Leader Harry Reid is chock-full of sweeteners which could serve as a legislative pacifier for Democrats outraged over the concessions President Obama has handed to Republicans. Reid has set up a test vote on the package for Monday, which could clear the way for a final vote as early as Wednesday. The bill stands a good chance of passage in the Senate, but the House is less predictable as rebellious Democrats accuse the president of caving and clamor for changes. House Democrats voted in a closed-door meeting Thursday not to allow the package to reach the floor for a vote without changes to scale back tax relief for the rich. Among the extra provisions are a tax credit for biodiesel, a tax credit for ethanol, extensions of tax credits for energy-efficient homes and appliances, and credits for training mine rescue teams. It would allow millions of dollars worth of expensing for film and production companies doing work in the United States, give breaks for the rum trade in Puerto Rico and the Virgin Islands, provide incentives for investment in the District of Columbia and provide other benefits for the battered Gulf coast. When a baby is crying out of control, put a pacifier in its mouth.I guess Dems are admitting to being babies.Reply

  • Middle Class and fading...

    It took the Republicans over two months to propose their own budget. That is totally unacceptable. What – they had something better to do?

    • JR

      Of course — they first needed to talk about gay marriage, restitution for police dogs, abortion, the “Cheeseburger Bill” and a few other wedge non-issues so they could rile up their brain-dead base. The Republicans have no actual plan for state government other than to continue their own political careers by turning citizens one against another.

  • Jon

    Cut the waste and raise taxes a little. Fair enough and hits both political parties. Let’s just get it done.

  • tired of greedy politicians

    How much do you wnat to bet they wasted their time so this would go into a special session whre they can continue collecting their per diem? We should be giving them encentives for finishing business early much like we reward highway construction companies for finishing up highway projects.

  • cut it

    Keep cutting. I’m sick of tax $ favoring the lazy.

    • dphilips

      Thats right everybody that needs welfare is lazy! What a hillbilly!

      • cut it

        Try using a few more exclamation points, pepper in something emotional and always mention the children and we will suddenly agree with you. Sounds like someone protests too much.

        • what the

          But a Department of Revenue analysis showed a $12 yearly tax cut for a family earning less than $30,000 a year compared to $206 for those making more than $250,000 a year.cut it you think this is right. Are these the lazy people the ones
          trying to live on 30,00. a year

    • dphilips

      Keep cutting taxes,before long you will have no police, no fire, no sewer ,no water no paved roads, no regulation of air traffic. What a great place to live!

      • cut it

        And so by your logic, the next step is we will all live under Thunderdome rules. Why not keep it going even further and the more outlandish it gets the more people will suddenly agree with you.

  • bml

    Just an FYI to those saying this budget has taken so long…. the Repubs are actually putting it together rather timely if you look historically. The Dems are actually complaining about how fast they’re doing it. And for the record, I do not align completely with either party. Just sayin’ it is a timely process thus far this year.

    • toppkatt

      Budget doesnt really matter,as Gov Dayton will veto anything Republicans do

  • Naomi

    I really wish people would understand that a tax on anyone is a tax on all. If you tax oil companys it gets passed on to you, if you tax small business it gets passed on to you, if you tax banks it gets passed on to you. The only way to stop this madness is to stop increasing taxes and force government to live within a budget. This class warfare is the oldest political ploy in the books. Lets not fall for it againl.

  • snowman

    Lady, what YOU dont understand ,is that it takes tax dollars to run the state,and municiipalities. Without taxes there will be no services, then again,im sure most of you rubes would rather drill your own wells, have your own outhouses and generate your own power,and as long as gun laws are so liberal, keep that shotgun out to protect your property

    • Jason

      Way to put that woman in her place. I couldnt agree more with the rest of your statement.

      • Naomi

        So at what point do you stop increasing taxes. I understand fully. Once again a dem has to stoop to name calling when he can’t make his case. There is a reason republicans are better off, they know how to handle money and when to cut up the credit cards.

        • Southern MN Mom

          Dear Naomi-

          YOU ROCK GIRL! It is obvious that you understand that the time has come for government at all levels to stop spending money it does not have. Did either of these guys learn anything from the November Massacre? The group of Republicans that now control BOTH state houses are not your usual GOP as Snowman, Jason, Governor Dayton and other tax and spend Democrats are about to discover.

          It is obvious Snowman was not paying attention or sleeping in his high school writing classes. He is your typical antigun socialist who thinks we must raise taxes or civilization as we know it will come to an end. As for Jason, it is clear he has issues with a strong and intelligent woman such as yourself.

        • paul

          yep thats what Bush did he cut up the credit cards ………………………………only after he MAXED them out! rebublickins are No better with money than Democrates………. they both are terrible !

          • Kevin

            Thats why the teaparty was formed. The people are sick of it.

            • Dirk

              But they not sent forth one program as to how to do things. Just saying stop spending over and over again will do nothing to solve anything

        • Gordon

          Naomi, you need to read more posts. And everybody has to quit name calling.

          You quit raising taxes when
          the prison population starts to drop,
          when people stay healthy so they don’t end up with chronic conditions
          when people have respect for laws and each other,
          when people accept terminal conditions of family members
          or when we no longer care about each other and say tough luck

          If you look at foreclosed house, there were plenty of them in republican areas.

          • Southern MN Mom

            Dear Gordon-

            You can try and spin all this in whatever manner you wish, but the fact remains. We cannot and will not tax itself out of a recession that has no end in sight. Government is going to have to get by with less tax revenue. Tough changes and brutal decisions are coming to Minnesota and every other state with budget shortages.

            The Republicans that control both Minnesota state houses are not your GOP of the past. They are going to do what they feel they were elected to do-reduce the size and cost of Minnesota government.

            • Gordon

              The fact is yes Republicans won the last election. When the economy doesn’t get any better, when people who are effected by policy changes understand what happen do you think an independent voter will vote the same way again?
              President Bush gave tax breaks to the wealthy. Did that stimulate the economy beyond belief? No, It increased the national debt to by percentage increases not seen since the Reagan era.
              The Republicans are playing politics with the tax dollars. Cutting LGA to the cities that voted democratic is plain political BS. Diverting money from mass transit to out state roads is all partisan politics

              The Republicans are going after teachers to try and end the tenure system. Way back when I thought it was 7 years to gain tenure. I really don’t think someone can fake it that long. I have seen people’s true personality come after the six month probation passed.

              I watched some of the transportation debate last night. These are not the Republicans of the past. They flung many mean spirited comments at other representatives for stating opinions, they flung out untruths as pointed out by the former tax chair,. One asked another out state rep if he ever took mass transit to work. When he said you can’t get here from there, the Republican started to mock and shred him for the answer.

              • an Old Teacher


                The Republicans are now after many years, in charge in of what is going to come out of our legislature. Many of these GOP legislatures ran and were elected on pledges to hold the line on taxes and shrink government. The people of Minnesota will decide during our next major election if they have done a good job.

                As for mean spirited comments, just read any of the blogs on this website when it comes to any Republican or any Republican program. It is time for Democrats to quit whining like spoiled children who are not getting their way.

                I am a retired high school teacher who loved my 35 years of teaching in a very rural MInnesota. I wanted to work with young people, but I knew going in that I was not going to do all that well financially working for the public. THAT WAS MY CHOICE. As for my union, it did very little but take my dues and protect teachers with no skills and or passion for children. I was granted tenure after two years, not seven.

                • Gordon

                  Then it is 7years for the University. Still two years should be enough do determine if you are a decent teacher, but maybe not.

                  Perhaps you did not read what I said earlier about everybody needs to quit name calling. So what do you call democrats but a name.

                  Unions are only as good as the members that participate in them as I had a union long for a long time. Sadly union leadership on the national level has become about power. Much like a business runs, much like politics. DO they protect the bad worker. It depends on your viewpoint. I wanted to make sure that deficiencies were documented and undeniable. There is nothing wrong with that.

                  In the debate of extremes the truth lies somewhere in the middle, the problem comes how do you get there.

          • Naomi

            We the people, not the government says how much we will spend. We do that by electing people that agree with the majority of the people. Unless you were in a cave during the last election you know what the people said. And although Dayton was elected on the promise of raising taxes it really doesn’t matter as the governor does not write the laws, he only approves. And as far as foreclosed houses, those were all demacratics living in republican areas.

            • Gordon

              If the Republicans had a clear mandate Emmer would be governor.Lori Swanson DFL is attorney general Rebecca Otto, DFL state auditor. All the statewide offices went DFL. Remember for longer than one election at a time. You and your ilk all post about cutting taxes. What do you want not funded. Spit it out. The amount of money that goes into AFDC is not so great that cutting “welfare freeloaders” will solve all the problems. Other things are funded for a reason. People like you don’t have a clue what is funded under health and human services.
              Government is the people. It is not Republican or Democrat. The latest national survey showed this breakdown:
              Among all surveyed by Pew, the breakdown was 25 percent Republican, 33 percent Democratic and 34 percent independent
              The last figures I could find for Minnesota were from 2009. When the election cycle comes around again you can’t be guaranteed what the 34% independents will do, nor the 33% democrat for that matter. Your party’s mandate is in your brain. When the economy is no better do you think the people will vote the same way?

            • Fitriachiibocah

              Your problem, is that you sitsocnently attempt math at all. Instead, it’s the same ol’, same ol’. You really do have a concept problem of not spending more than you bring in, don’t you? You also have the comprehension problem that those bulking up the spending are not the GOP. Your problem, not mine.First of all, the $81.5 bill would be the *increased* non-existent, future revenue by not [correction] increasing taxes on the wealthiest of Americans . Big deal. Still doesn’t balance out the spending in the original framework, combined with the rest of the pork they are busy ladling into the soup of spending today. Second of all, the $483 would be your precious revenue lost but what the heck do you care? Slam Joe and Josephine Blow against the wall in a recession by advocating (as you are) that they get the tax increases too. Tell me, Billy Bob do you factor in the economic repercussions for that tax increase? Secondly, do you factor in the business/employment repercussions for that tax increase? But no you assume revenue remains status quo in the wake of tax increases.Try having another gander at the US Treasury charts, with the declining revenue during the Clinton years, despite a rosy economy. DoofusYou’re pathetic as a lib/prog. Talk about callous, hard hearted and an economic doofus.Second of all, I will accept no lectures of either math or spending from you. Until you can actually grasp the concept of not spending more than you bring in, you are simply another lib/prog loser, playing the spin game. And badly at that. Indicative that you totally ignore my comment that even if the lib/progs got their way, increased revenue by the $81.5 bil (assuming they would actually continue with current earnings ), that it still didn’t cover the added cuts, credits, UI and pork they are busy adding today. Can you say deficit, deficit, deficit?Then, of course, you may want to pick up on Obama, finanally sliding in a recognition that *tax cuts create revenue*, with his hope that we can reform the tax codes by eliminating tax credits and lower the tax levels across the board so we can garner more revenue yesterday. No I’m not going to provide the link for your lazy butt. Try reading the NYTs, and do your own homework for a change. Guess you’re behind the times of Obama’s mea culpa , eh? So inconvenient to your talking points . LOL. Revelation! It’s something I can actually get behind and there are few of those agendas in this admin. But with a GOP Congress, it will be a race to the finish line to do that so that one political party gets credit over the other just in time for the next POTUS election. Now, I’m a bit busy with things tonight, and so far, I’m the only one around to bail you out of your time-out spam comments. Like don’t you work for a living?? I suggest you wait until any of us has time for your babble, guy.Reply

  • mnresident outstate

    I applaud the republicans for keeping a campaign promise. I know that is a bit unheard of, but we appreciate it. If previous house and senate members had understood that you can not spend what you do not have, we would not be in these dire straits. Also, for those of you that do not know, there is more to Minnesota than the twin cities, and most of those Minnesotans do not feel it should be compulsory for them to pay for the unnecessary niceties of the twin cities residents

  • mary

    What I want to is why we haven’t heard that if and when the government shuts down all military personal WON”T get paid but will have to continue to service and protect our country. Than what are we suppose to do when out bills are needed to be paid, BUT they won’t because we won’t be getting a paycheck!
    Let’s get the budget figured out so the military and their families won’t have to worry about getting paid.

  • Joshua

    And, this is why the Minn. Dept. of Human Rights should be cut from the budget, and ran out of this state, see the case file…


    • Srewed by an employer

      Having a case heard there myself and winding up the ladder, I can agree with you.

  • http://theplaying.net/budget-bills-take-center-stage-at-minn-capitol/ Budget Bills Take Center Stage At Minn. Capitol | Daily sports news - The Playing

    […] Budget Bills Take Center Stage At Minn. Capitol Budget Bills Take Focal top Stage At Minn. Capitol Th&#1077 Minnesota House &#959f Representatives voted Monday t&#959 &#1089&#965t state income &#1072n&#1281 property taxes &#959n businesses wh&#1110&#406&#1077 slashing aid t&#959 numerous large cities, fulfilling key Republican priorities &#1072n&#1281 setting th&#1077 desk f&#959r a conflict w&#1110th Democratic Gov. M&#1072rk Dayton. Read more &#959n CBS Minnesota […]

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