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Dayton offers GOP lawmakers a reduced tax plan

Posted by: Rachel E. Stassen-Berger under Funding, Gov. Mark Dayton, Minnesota legislature, Democrats, Republicans, State budgets Updated: May 16, 2011 - 11:52 AM

By Rachel E. Stassen-Berger and Eric Roper

Governor Mark Dayton Monday said he offered to meet Republican lawmakers “halfway,” proposing $1.8 billion dollars in spending cuts and $1.8 billion in tax increases.

"I'm hoping we can get this done in the next seven days. If not, I think it's their responsibility and their fault because I've offered to go half-way...I've given up as much as I've asked them to give up," Dayton said.

His proposal cuts his tax hike plan nearly in half and cuts Republicans’ spending reductions also in half.

“My new tax proposal raises the gross income levels at which the fourth-tier income tax rate applies for the typical married couple to over $300,000,” Dayton said in a letter Monday to legislative leaders.

Senate Majority Leader Amy Koch said at a press conference this morning that Dayton requested a tax increase at their morning meeting but they are "not supporting any tax increase."

House Speaker Kurt Zellers said simply, “I know we don’t have the votes for a tax increase."

There are ways to patch together a budget deal without raising taxes. One idea legislators have floated would raise a mix of fee, surcharges and close some tax loopholes to narrow the gap.

With a week to go in the legislative session, Zellers remained cool to that, too.

“One person’s loophole is another person’s incentive to expand here,” he said. “”It’s awfully complicated and I don’t think we could get into that much change in tax policy in a week’s time.”

Dayton said he has had the new tax proposal in his back pocket for "a while."

"For them to want me to go all the way over to their budget target, it's not compromise, it's not reasonable and it's not realistic," Dayton said. "I'll go half-way, I won't go farther."

Although the governor said lowering his tax increase proposal is his half-way mark, Republican leaders have repeatedly said no tax increase is acceptable. Dayton said if lawmakers can provide other ways to raise revenue -- including gambling -- they would have to bring those proposals forward.

If lawmakers and the governor do not reach agreement by May 23, they would have to keep trying in special session. No agreement by the end of June? State government shutdown looms.

Star Tribune staff writer Baird Helgeson contributed to this report.

Dayton new proposal

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