Dayton says Minnesota works well for many, can do better

Minnesota is a great state that can do better still for those who have not shared in its prosperity, Gov. Mark Dayton said Wednesday in his State of the State speech.

Spinning through a long list of national accolades for Minnesota's economy and quality of life, Dayton told an audience of legislators and dignitaries at the University of Minnesota that Minnesotans should take "deserved pride" in the state's success.

"Most are too 'Minnesota modest' to say it," Dayton said. "Others don't want to believe it. And, of course, for too many others, it's still not true."

To that end, Dayton urged the Legislature to swiftly approve a $30 million extension for unemployed Iron Range workers, saying failure to do so would be "cruel." That extension, for which Dayton has been pushing for months, hit a roadblock Tuesday on the first day of this year's legislative session amid partisan squabbling.

Dayton said he would release details next week of a proposal to provide better economic opportunities to Minnesotans of color. He cited statistics: that the median income for U.S.-born black families in Minnesota is 55 percent less than for white families and that their poverty rate is 4½ times greater. For Mexican-American families, median incomes are 40 percent less.

"It's time we stopped holding our schools and educators solely responsible for closing our state's opportunity and achievement gaps," Dayton said. "Every facet of our society has a part to play." To that end, Dayton pledged to double the percentage of minorities in state government in the next three years.

Displaced by the State Capitol renovation, Dayton spoke for 40 minutes at the U's McNamara Alumni Center. A year into his second term, Dayton's speech helps set the tone for the session. At the top of the agenda is what to do with a projected $900 million budget surplus.

Sen. Jeff Hayden, DFL-Minneapolis, praised Dayton's focus on racial equity. "It really means we have to be serious about [tackling disparities]," Hayden said. "It shows we are putting this at the forefront."

Previewing a budget blueprint coming next week, Dayton said he would propose "modest spending increases and middle-income tax cuts." To that latter point, he again called for an increase in the state's child care tax credit.

Republican leaders cautioned afterward that they are wary of even modest spending hikes. "Any additional spending will be challenging," said House Majority Leader Joyce Peppin, R-Rogers. She said Republicans would push for more aggressive tax cuts than what Dayton advocated.

The governor warned that would be a tough sell.

"My No. 1 priority in this legislative session will be to protect the fiscal integrity of our state government," Dayton said, suggesting the recent run of budget surpluses were largely thanks to the upper-income tax increases he pushed through in 2013. He repeated recent predictions by some economists of a national recession by 2018.

"If a meteor from somewhere in the universe should ever come crashing to Earth and land on Minnesota, it will be, some say, because taxes here are too high," Dayton said.

While running through accomplishments of his time in office, Dayton said some priorities have been neglected.

"We must make additional investments to repair and improve Minnesota's transportation systems every year for the next 10 years, or they will get worse," he said. He acknowledged that his own proposal of a year ago, which included a gas tax increase, proved unpopular with legislators. "I'm waiting for an alternative," Dayton said.

Having recently proposed $1.4 billion in state bond-backed construction projects, Dayton urged legislators to adopt his proposal to focus $220 million of it on what's emerged as one of his top priorities: improving water quality.

"All Minnesotans should have the right to clean, safe water for their drinking, bathing and recreation," Dayton said. He promoted a greater state effort to combat climate change, calling for the state to be a partner in cultivating "thousands of innovative, clean-energy jobs."

In perhaps the most powerful moments of the speech, Dayton condemned recent instances of religious and racial discrimination.

Attending at Dayton's invitation was Asma Jama, a Coon Rapids woman assaulted last November at an Applebee's because she was not speaking English. Another woman smashed a beer mug across her face, requiring 17 stitches.

"I ask all of you to join me in showing her, and all Muslim-Minnesotans, the open arms and respect they deserve," Dayton said. A long standing ovation followed.

Star Tribune staff writer Ricardo Lopez contributed to this report.

Patrick Condon • 651-925-5049