Dayton releases budget proposal

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MHTA – Governor Mark Dayton released a budget proposal that would make broad changes to Minnesota’s tax system and channel dollars to early childhood and higher education. It would collect sales tax for online purchases and make a small investment in broadband goals.

“If the investments in my budget proposal are made, they will yield returns in new jobs, private investments, vibrant communities and additional state and local tax revenues; and they will help keep our economy moving forward,” said Governor Dayton. “They represent my best judgment about what Minnesota needs to grow our economy, expand our middle class, improve our quality of life and take care of those most in need.”

The budget highlights include:

  • Sales tax drops from 6.875% to 5.5%
  • Extends sales tax to clothing more than $100, online purchases, legal & accounting fees
  • New income tax bracket of 9.85% on couples earning $250,000+, individuals earning $150,000+
  • Corporate tax rate drops from 9.8% to 8.4%
  • $500 property tax rebate

House Speaker Paul Thissen (DFL-Mpls) said DFL lawmakers, who control both chambers of the legislaure, are looking forward to working with the governor in “putting together a budget that is going to work for Minnesotans” and won’t include “any tricks or gimmicks.” Lawmakers will spend the next several weeks debating and voting on Dayton’s proposal as well as other budget and policy initiatives.

Republican leaders were more skeptical. Sen. Dave Thompson (R-Lakeville) said the governor has talked about raising taxes for the past two years and “wants to make the budget bigger,” a theme echoed by Rep. Jenifer Loon (R-Eden Prairie) who said she’s concerned the budget could slow the economic recovery.

A revised February Economic Forecast is scheduled to be given Feb. 28. That would leave legislators a little more than two weeks until the first committee deadline. According to a memo from House Speaker Paul Thissen (DFL-Mpls), three committee deadlines for the 2013 session have been established:

  • March 15, committees must act favorably on bills in the house of origin;
  • March 22, committees must act favorably on bills, or companion bills, that met the first deadline in the other house; and
  • April 19, the House Ways and Means Committee and the Senate Committee on Finance must act favorably on major appropriation and finance bills.

By law, legislators must adjourn this session by May 20.

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