GOP, DFL squabble over impact of new Minnesota budget

Minnesota legislative Republicans condemned the new two-year budget that imposes more than $2.1 billion in new taxes.

Republicans said the DFL-led plan needlessly raises taxes as the state's economy is already lifting out of the worst recession since the Great Depression. They said the tax hikes will hit every resident of the state.

"Why? Did you look at the spending? Where is the reform? Where are things going to get better? You can't point to that," said House Minority Leader Kurt Daudt, R-Crown.

The state's new two-year budget kicked in Monday, which Republicans used as a chance to draw a contrast between their budget and the new one drafted almost entirely by Democrats. The new budget wiped out a $627 million deficit and paid for the new spending by boosting taxes largely on Minnesota's top earners and smokers. The new taxes also hit consumers of Internet downloads, rental cars and computer repair.

DFL Gov. Mark Dayton's office outlined more than two dozen ways the state will improve in the coming years, touting more money for education, property tax relief and new money for job creation initiatives.

Legislative Democrats said the budget ushers in a new era of fiscal stability after years of one-time shifts and borrowing.

"Today, for the first time in a decade or more, our state's budget is balanced without borrowing or gimmicks, and we did it without a special session or government shutdown," said House Speaker Paul Thissen, DFL-Minneapolis.

"This is news that most Minnesotans would celebrate - and in fact, public polling continues to show broad support for the DFL budget plan," Thissen said in a statement. "And yet, Republicans continue to engage in the kind of negative, Chicken Little predictions of economic doom and gloom that do a disservice to our state."

The budget Republican leaders and Dayton approved two years ago -- only after the longest state government shutdown in Minnesota history – relied on borrowing from schools and the private sector, moves that caused the nation's top bond agencies to downgrade the state's credit rating.

Senate Majority Leader David Hann, R-Eden Prairie, said the bond-rating agencies were "overly pessimistic" and that the state outperformed the budget targets by $3 billion.

"We think that record is a good record and one we can be proud of," Hann said.