Gov. Mark Dayton dismissed a Republican plan to cut taxes by $2 billion as a “nonstarter” and said he will not negotiate until the House GOP majority comes closer to his budget targets.
“If they’re going to use this as an opportunity to take a wrecking ball to everything we’ve built up in this state … in terms of fiscal integrity and responsibility, it will be a nonstarter,” Dayton said.
Dayton has proposed spending the projected $1.9 billion budget surplus, most of it on education and especially a plan to offer universal prekindergarten. House Republicans would cut taxes by $2 billion.
Rep. Greg Davids, chairman of the House Taxes Committee and chief author of the Republican tax plan, said he was disappointed in Dayton’s negative response and “class warfare,” but said he remains hopeful: “When he gets his DFL talking points out of the way, we can sit down and negotiate a bill that works.”
The Republican plan, which passed the taxes committee Tuesday, would give all income tax filers a temporary tax break that would amount to $70 per single filer making $50,000 a year, more for those with dependents. That exemption would expire after two years. The bill would permanently phase out the statewide business property tax and reduce taxes on Social Security income and military pensions.
Dayton criticized the plan for offering small, temporary tax breaks for the middle class while extending permanent breaks to wealthy estates and businesses. He said the GOP plan would cost $4 billion per budget cycle once it was fully phased in, turning the $1.9 billion surplus now projected into a deficit.
“To put us on that ledge where the first ill wind could push us over into another decade of … chronic deficits, is just unacceptable,” Dayton said.
He did acknowledge that his spending proposals — particularly his plan for universal prekindergarten — faced their own ramped-up costs in future years. Dayton has proposed putting $343 million into universal prekindergarten during the next two years, but that price tag would grow to $914 million in 2018-19.
Dayton offered to move money from his spending proposals to the state’s reserves, putting a dollar of his spending into reserves for every dollar Republicans take from tax cuts and put in the rainy day fund.
Davids said any such deal would have to be negotiated with House Speaker Kurt Daudt, R-Crown, but he framed how far apart the sides are: “I guess our two bills have something in common. His bill is a nonstarter for me, and my bill is a nonstarter for him.”