With an insider’s eye, Hot Dish tracks the tastiest bits of Minnesota’s political scene and keep you up-to-date on those elected to serve you.

Contributors in Minnesota: Patrick Condon, J. Patrick Coolican, Patricia Lopez, Ricardo Lopez, Abby Simons, Rachel E. Stassen-Berger and Glen Stubbe. Contributors in D.C.: Allison Sherry and Jim Spencer.

Posts about State budgets

Minnesota makes another push for income tax reciprocity

Posted by: Updated: June 19, 2014 - 3:04 PM

Minnesota and Wisconsin residents who live in one state but work in the other could soon have their income taxes dramatically simplified as part of a new tax reciprocity proposal.

Minnesota revenue officials on Thursday offered to lower Wisconsin’s annual payment by $1 million if the Badger state approves of the agreement by Sept. 30.

‘That millions dollars is part of Minnesota’s strong desire to reinstate income tax reciprocity,” said Sen. Roger Reinert, a Duluth Democrat who has worked with other border legislators for an agreement. “This really is us extending a hand and saying, ‘Work with us.’”

Wisconsin and Minnesota have not been able to broker a new arrangement since the four decade old income tax reciprocity agreement lapsed at the end of 2009. Suddenly, 80,000 residents who lived in one state but worked over the border had to file income taxes in both states.

Wisconsin revenue officials could not immediately be reached for comment.

The deadlock has come down to money.

Minnesota revenue officials studied the issue and determined that about 56,000 Wisconsin residents work in Minnesota, more than double the amount of Gopher state residents who cross the border for work.

Minnesota's study concluded that Wisconsin needs to pay about $92.5 million a year due to the difference.

The problem is, that’s about $4 million more than Wisconsin officials believe they should pay.

Minnesota made similar offers in 2012 and 2013, but both offers included the $4 million gap. Wisconsin officials rejected both proposals.

This year, Minnesota legislators decided to see if an additional $1 million might sweeten the deal.

“It really is a desire on the part of border legislators who are trying to make it a little smoother,” said Minnesota Department of Revenue Commissioner Myron Frans.

Differing tax rates between the two states also aggravates the problem.

Minnesota limits the credit it offers consumers for taxes paid in another state to the amount they would pay if they lived in state. Frans said he does not believe Minnesota taxpayers should subsidize Wisconsin’s higher effective tax rate.

Wisconsin officials have said their residents already pay enough.

Reinert and other border legislators said they still routinely hear from residents frustrated with having to file two state income tax forms.

Business owners, Reinert said, are just as frustrated that they have to keep two sets of tax records for employees who live across the border.

The issue boiled over in 2009 as the economy tanked and budget officials in both states were desperate for money.

Wisconsin delayed its payments to balance the state budget, creating a deeper hole for Minnesota's budget officials.

Then-Gov. Tim Pawlenty grew frustrated and let the program expire, saying that Wisconsin’s 17-month delay was too much for Minnesota’s shaky budget.

The new agreement allows Wisconsin to make four equal payments a year, minimizing one-time blows that can be difficult in a sagging economy.

For state leaders, the issue has become a balance between protecting state money and promoting convenience for taxpayers.

Frans said the governor authorized the new $1 million dollar offer, but they refuse to make a deal unless it is fair for all Minnesota taxpayers.

Minnesota still has reciprocity agreements with Michigan and North Dakota.

Dayton off to D.C. to press for water project funding, talk economy

Posted by: Updated: June 10, 2014 - 10:02 PM

DFL Gov. Mark Dayton is traveling to Washington, D.C., Wednesday to push for federal money for the Lewis & Clark fresh water pipeline in southwest Minnesota.

Dayton will attend a meeting hosted by U.S. Sen. Amy Klobuchar, D-Minn., with U.S. Secretary of the Interior Sally Jewell. The governor, U.S. Sen Al Franken, D-Minn., and other members of Minnesota's congressional delegation plan to stress the water project’s economic importance to southwestern Minnesota.

Minnesota's political leaders are pressing the federal government to commit funding to reduce or eliminate any additional costs to area residents and local governments.

Minnesota legislators approved an agreement at the end of the last legislative session that speeds the full payment for the $77 million project, which means local communities don’t have to wait for the full federal portion.

On Thursday, Dayton and ten Minnesota business leaders will meet with senior White House officials for a roundtable discussion on Minnesota’s rebounding economy.

Later that afternoon, Dayton will attend a celebration at the White House to honor the Minnesota Lynx for winning their third WNBA Championship in 2014.

Minnesota tax revenue lags slightly in May

Posted by: Updated: June 10, 2014 - 4:08 PM

Minnesotans paid more than $1.4 billion in state taxes in May, about $17 million less than state budget officials predicted.

Individual income tax collections were $15 million, or 2.3 percent, less than protected. Sales taxes nearly hit their target, coming in at $372 million, just $1 million below estimates. Other form of revenue beat targets by $22 million, offsetting much of the decline in other areas.

The state has taken in $16.8 billion for the fiscal year, about $95 million below the forecast.

Minnesota budget officials urge caution in interpreting revenue numbers, which can fluctuate wildly from month to month.

Dayton agrees to limit self-funding, campaign spending

Posted by: Updated: May 30, 2014 - 11:34 AM
Mark Dayton, center, and Tina Smith talk with Secretary of State Mark Ritchie

Mark Dayton, center, and Tina Smith talk with Secretary of State Mark Ritchie

Gov. Mark Dayton signed an agreement Friday that will sharply limit his ability to personally bankroll his re-election campaign.

Dayton agreed not to spend more than $20,000 of his own money in exchange for about $447,000 in public subsidy. The agreement also limits Dayton’s campaign to about $3.6 million.

That's a sharp contrast to 2010, when Dayton poured $3.7 million of his own money into the campaign and narrowly beat GOP rival Tom Emmer.

Now an incumbent with a list of accomplishments, the governor said the agreement will allow him to spend less time raising money and more time traveling the state meeting with Minnesotans.

The agreement has no bearing on what outside groups can spend defending Dayton or attacking his rivals.

Dayton, a department store heir, has already embarked on an active fundraising schedule, taking in more than $1.1 million.

Dayton and his running mate, Tina Smith, came to the Secretary of State’s office Friday to file the paperwork to make their campaign official.

The governor said the theme of his first campaign was to make Minnesota better.

“I think we’ve indisputably made Minnesota a better state,” said Dayton, noting new education investments, a balanced budget and progressive legislation, such as legalization of same-sex marriage. “That’s why I am running, not only to make Minnesota better, but to make it the best.”

Dayton and Smith will travel to Duluth this weekend to accept the DFL’s endorsement for governor and lieutenant governor.

Ample signs are already emerging that Dayton will have a heated and divisive race.

A GOP group that has criticized Dayton and Democrats for months parked a rented truck in front of the Secretary of State’s office displaying a huge banner criticizing the governor for the troubled rollout of MNsure, the state’s health insurance exchange.

The group, Minnesota Jobs Coalition, plans to park the truck outside the DFL State Convention in Duluth.

Truck greeting Gov. Mark Dayton outside Secretary of State's office.

Truck greeting Gov. Mark Dayton outside Secretary of State's office.

Dayton to decide fate of online lottery ticket ban

Posted by: Updated: May 29, 2014 - 11:11 AM

Gov. Mark Dayton plans to sit down Thursday night and weigh the fate of a measure that would end the Minnesota State Lottery’s online scratch-off lottery ticket sales.

The governor has anguished over this piece of legislation more than any other this session. The lottery director that Dayton appointed fought hard to block the ban, but legislators overwhelmingly passed the measure with a veto-proof majority in the closing days of the session.

“I am really torn,” Dayton said recently. “I realize that if I were to veto it and they were still in session, they would override my veto.”

Many legislators argued that online sales could increase gambling addiction, but Dayton is concerned that the bill became far more sweeping and would end lottery ticket sales at gas pumps and ATMs. The measure also blocks the lottery from every expanding into casino-style games, like keno or blackjack, a provision supported by the tribal gambling industry.

“I am concerned that real impetus behind this bill was not to protect the citizens of Minnesota, but to protect the interests that now benefit from the status quo,” Dayton said. “That is the wrong reason for the legislation to be supported and passed.”

The lottery became online sales of scratch-off lottery tickets earlier this year to reach younger Minnesotans who have not embraced the traditional store-bought tickets. Lottery director Ed Van Petten said that the online sales are more of a marketing strategy to get people to buy traditional lottery tickets.

Many convenience store retailers that rely on lottery ticket sales attract customers were not persuaded by Van Petten's argument.

The scratch-off lottery ticket sales make up only a tiny fraction of the lottery’s annual sales.

Dayton has until Friday to decide whether to veto the measure, which would be his first of the legislative session.

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