MINNEAPOLIS (WCCO) — Gov. Mark Dayton scaled back his budget plans Thursday, scrapping some major tax hikes but keeping some ambitious spending programs.

Call it Plan B.

The Governor dropping a sales tax plan in part because the economy is looking better. And in part because of strong opposition from business.

The governor admits his plan to cut the sales tax and extend it to new items was never popular.

He’s challenged his critics to tell him how to erase a $627 million deficit, and spend more on education.

So far, no takers.

“Where they are going to cut, how much, who’s going to be affected, who’s going to be hurt,” Dayton said. “Just saying no to tax increases is not a budget plan, and it’s not responsible.”

The sales tax plan and the money it generated is gone.

So is a $500 property tax rebate for every homeowner.

But a 94-cent a pack cigarette tax hike remains. And an income tax hike on the top 2 percent of Minnesota earners.

The extra money will be used to pay for education from pre-school to post secondary.

“It’s part of a responsible balanced package,” he said. “To balance the budget and make new investments for a better future. And those who don’t want to pay a single dollar more in taxes need to own up to the responsibility to tell us what are the consequences of that.”

Minority Republicans compare the governor’s budget to college students on spring break.

“It’s kind of like government gone wild down here,” said Sen. David Hann.

They say the economy is already improving — without tax hikes.

But the GOP hasn’t — and won’t — offer a budget of it’s own.

“We’re committed to finding a government that works better, and not a government that’s just more expensive,” Rep. Kurt Daudt said.

Democratic leaders who control the House and Senate say they also favor raising the income tax on wealthy Minnesotans, so that is very likely to happen.

But that alone won’t cover the cost of new spending programs, especially on education.