Sections

Weather Forecast

Close

Proposed Dayton budget, tax changes 'complicated'

Gov. Mark Dayton announces changes he wants to make in Minnesota's $46 billion, two-year budget on Friday, March 16, 2018. Don Davis / Forum News Service1 / 2
Commissioner Myron Frans of Minnesota Management and Budget, with Gov. Mark Dayton at his side, talks Friday, March 16, 2018, about changes the administration want to make in tbhe current two-year state budget. Don Davis / Forum News Service2 / 2

ST. PAUL — Minnesota Gov. Mark Dayton suggests some tax cuts and some increases, lots more spending for some programs, a little more for others, no more for much of state government.

Republicans disagree with much of what he proposes. However, they agreed with one thing the Democratic governor said: "I will warn you in advance, this is complicated."

Dayton unveiled his proposed changes to the state's current two-year, $46 billion budget on Friday, March 16. His plan now goes to the Republican-controlled Legislature, where much of it will face opposition.

The most complicated part of the plan deals with taxes as Dayton tries to use federal tax law changes to leverage increased business taxes to lower income taxes for low- and middle-income Minnesotans.

His revenue commissioner, Cynthia Bauerly, said no Minnesota "wage earner" will pay higher taxes under the Dayton plan, and more than 2 million of the state's 2.9 million income tax payers will pay less.

His plan includes a per-person tax credit of $60 for low- and middle-income people.That would provide an average tax cut of $117 for almost 2 million Minnesota families Bauerly said, and $160 for 329,000 others. Also, the working family tax credit for low-income workers would be expanded.

However, many business owners and corporations would pay higher taxes, especially ones with foreign income.

There would be some new fees, such as $2 more for each vehicle license plate and other title and registration transactions to fund fixing a trouble-plagued computer software system.

"I apologize to Minnesotans for the additional cost," Dayton said, adding that he would not take money from other parts of state government to fix the software issues that have resulted in lengthy delays for people dealing with registration and license issues.

In order to afford to begin state regulation of assisted living facilities, Dayton calls for placing a $6,275 initial fee on the facilities, which rises to $7,750 when a license is renewed.

Elder abuse prevention and investigation would get $12 million of Dayton's new spending. That is in response to reports over the last few months that the state has failed to investigate hundreds of cases of abuse in nursing homes and other senior facilities.

The governor outlined plans to spend all but $123 million of the state's expected $329 million surplus.

School safety and education would take $47 million of the surplus, the largest single category. Of that, Dayton suggests spending nearly $16 million to allow school districts to improve security. The one-time payments could be used to make buildings safer or hire people such as security officers and counselors.

"The intention here is to provide grants to local school districts so they can decide for themselves the type of safety measures they need," Dayton said.

Another $17 million would be spent on improving special education funding that federal officials have not paid up to levels they promised.

Spreading high-speed internet connections, known as broadband, across rural Minnesota would get $30 million. Dayton set border to border broadband as a goal when he ran for governor in 2010 and wants the $30 million as he winds up his tenure in office.

On broadband, he said, "those who have it can operate worldwide; those who don't are seriously handicapped."

Dayton would establish a state office to respond to sexual misconduct in state government, at a $6 million cost. He also would spend nearly $20 million to improve computer security.

A trio of health-related tax or fee increases and extensions are proposed. Dayton would increase personal care assistant costs 1.69 percent, would charge about a penny for every opioid pill sold and would keep a tax charged on patients of medical providers beyond its planned 2019 end date.

Dayton called his spending increase proposals "modest" and said he targeted tax cuts at the middle- and lower-income population.

Republicans has little good to say about Dayton's plan.

"Gov. Dayton's budget proposes over a billion dollars in harmful tax increases to finance hundreds of millions of dollars in government spending," said Jim Knoblach, R-St. Cloud, chairman of the House Ways and Means Committee.

Added Senate Tax Chairman Roger Chamberlin, R-Line Lakes: "Gov. Dayton is misleading people, saying his budget will lower taxes. The truth is, he's proposing a significant tax increase for many families, completely wiping out any savings they may have been entitled to after federal tax reform."

The Minnesota Chamber of Commerce did not like the Dayton proposal.

"Minnesota still sits among the five highest taxed states, imposing headwinds to growing our economy for the good of all Minnesotans," chamber President Doug Loon said. "The governor's supplemental budget not only significantly raises taxes on Minnesota businesses, but he also unwinds all the tax relief measures that he signed last year."

New spending

Here are some areas Gov. Mark Dayton proposes to increase spending in the current two-year, $46 billion Minnesota state budget:

• $47 million, school safety and education

• $12 million, elder abuse

• $13 million, opioid addiction

• $37 million, interest on public works funding

• $30 million, higher education

• $27 million, pension reform

• $30 million, broadband

• $15 million, Conservation Reserve Enhancement Program

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
Advertisement