Gov. Mark Dayton wants to earmark a giant share of the state’s $1.2 billion projected budget surplus for tax relief and to build up the state’s budget reserves.
The DFL governor wants $616 million in tax breaks for businesses and middle-class Minnesotans, including the repeal of three new sales taxes on warehousing services and telecommunications equipment and repair. The proposal also includes tax relief for married couples, Minnesotans with student loan debt and working families.
“Our improving economy has greatly improved the state’s budget forecast – giving us the opportunity to put more money in the pockets of Minnesota families and businesses,” Dayton said. “I urge members from both parties to work together to pass these tax cuts quickly.”
The proposal now goes to the DFL controlled House and Senate, where legislators have their own ideas on how to spend the money. The Minnesota House is expected to give final passage to a $500 million package of tax relief Thursday afternoon.
Republicans have been generally supportive of the tax relief, but blasted Democrats for imposing more than $2 billion in new taxes last year and then wanting credit for giving some of it back now.
"It's Minnesotans' money," Republican House Minority Leader Kurt Daudt said recently. "Give it back."
About half of the proposed tax relief would undo tax increases Dayton and Democrats imposed last year to beat down a more than $600 million deficit, repay debt to public schools and increase money for education.
Dayton said those choices were prudent then, but the state's robust economic growth gives them the chance to make revisions that make the tax system more fair.
“For those people who say we are not using wisdom in our mid-course correction based on changing circumstances, they are not in touch with reality,” Dayton said.
The significant windfall is adding a dose of election-year drama to the legislative session as both Dayton the House face voters in November.
The state has emerged from the deepest recession since the Great Depression and has been able to refill depleted budget reserves and pay back nearly $3 billion owned to public schools. For the first time in more than a decade, legislators have their first true surplus to divvy up. The extra money offers many advantages, but brings a lot of headaches as legislative leaders feel growing pressure from cash-strapped activist organizations that rely on state funding.
"There are a lot of needs out there that I am not addressing and there are people who are going to be unhappy with that, and I regret that," Dayton said.
Dayton is proposing eliminating the so-called marriage penalty, which means 650,000 married will no longer pay higher taxes than singles making the same amount of money.
He also wants to expand the working family credit, which would save the average Minnesota family $334 a year.
The governor is also pushing a plan to expand tax credits for child care, saving the average taxpayer who qualifies $430 per a year.
College graduates with student debt would save an average of $140 a year, under the plan.
The governor is also proposing streamlining business taxes to make them square with federal laws, vastly simplifying recording keeping for small businesses.
Dayton’s plan includes additional tax breaks for seniors, teachers, homeowners and veterans.
The governor wants to do away with a much-criticized new sales tax on repair and maintenance of farm equipment. He is seeking greater tax breaks for start-up businesses and entrepreneurs.
The governor’s proposal also seeks to modify the estate tax and eliminate the gift tax, which has been widely criticized.
The proposal doubles the exemption on the estate tax, to $2 million. Minnesota would no longer be one of just a couple states to impose a gift tax, under the plan.
Dayton is urging legislators to act in the next couple weeks, giving the state time to implement the changes before Tax Day. Many of the proposed tax breaks would be retroactive to 2013, such as the adoption credit and an income tax break for people who lost their home to foreclosure or a short sale.
"Minnesotans should know if the Legislature doesn’t act, it will cost them some of the tax savings I am proposing," Dayton said.
Dayton is not proposing making the marriage penalty retroactive, saying it would be too cumbersome to implement in the final few days as Minnesotans file their taxes.
The governor is seeking some new spending, about $162 million. Much of that money would go for raises for state-paid health care workers and extra money for low-income heating assistance.
Dayton would devote an additional $30 million to retain critical corrections staffers and pay for the state’s growing prison population.
He wants to set aside an additional $3.5 million to ensure that low-income students get a hot school lunch.
An additional $3 million would be set aside to pay for additional borrowing to fund statewide construction projects.
Dayton wants to use the remainder, about $455 million, to increase the state’s existing budget reserves of about $661 million.
Elected leaders have generally been comfortable with the existing reserve levels, but the last downturn showed that the amount was not nearly enough.
Minnesota Management and Budget Commissioner Jim Schowalter has said the larger reserve would give the state more cushion when the economy slides again.
The measure could also please the state’s credit agencies, which lowered the state’s credit-rating in recent years as the state relied on one-time accounting shifts and borrowing to nurse the state through the rough patch.
House Speaker Paul Thissen, DFL-Minneapolis, praised the proposed revisions to the state budget.
“Minnesota is headed in the right direction and the way to continue building on our progress is to expand middle class economic opportunity,” he said. “Governor Dayton’s supplemental budget has the right priorities to continue growing our economy from the middle out.”
Minnesotans should be able to use a website to register to vote, a bipartisan panel of lawmakers voted on Tuesday.
On Tuesday, the House Elections committee on a bipartisan vote approved the online practice that has been available — with considerable controversy — since last year.
“I think its an issue that is kind of a no brainer for the state of Minnesota,” said House Speaker Paul Thissen, DFL-Minneapolis.
DFL Secretary of State Mark Ritchie’s office began accepting online registrations last year without specific legislative instruction to do so. Democrats, Republicans and the nonpartisan Legislative Auditor said last year that the matter likely should have been approved by the Legislature first. Ritchie claims existing law gave him the authority to start registering voters online.
Despite a still unsettled lawsuit to stop the web-based registrations, more than 3,300 Minnesotans have registered to vote online. A judge is expected to decide the case by April.
By then, the Minnesota Legislature may have already put a practical end to the question of Ritchie's authority to create the online system. The legislative action would add the force of law to online voter registration.
A Senate panel is expected to take up a measure to approve online voter registration next week. The House may deal with the issue more expediently.
“To the extent that we can move it quickly, we’re better off,” Thissen said. With Tuesday's vote in committee, the House bill is ready for a full floor vote.
More than two dozen states offer voters online registration, although some states allow more limited web-based registration than others, according to the National Council of State Legislatures.
Gov. Mark Dayton’s administration rolled out a comprehensive government streamlining package Tuesday, outlining more than 1,000 proposed changes to make state services easier and more efficient.
The overhaul seeks changes in every corner of state government, from speeding environmental permitting to making it easier and faster the buy fishing licenses and pay taxes. The initiative also seeks to root out antiquated laws clogging up the books and adding work for state agencies.
Iron Range Resources and Rehabilitation Board Chairman Tony Sertich, who is leading the streamlining effort for Dayton’s administration, said state law is filled with antiquated provisions. He noted one state law even has a detailed prescription of exactly who must capture or kill wild boars in the state.
Dayton is staking a lot of political currency on the outcome of the initiative, which he calls “unsession.” He wants legislators to devote a significant amount of time weeding out antiquated or cumbersome laws.
But Dayton is not merely trying to declutter the state law books. He wants to make it easier and less aggravating for consumers of state services, which has been a frequent gripe when dealing with state government.
Dayton is not the first governor to try such an effort, but it is the most concerted one in a long time.
In selecting Sertich to lead the effort, Dayton has tapped a former House Majority Leader with a strong sense of how to get things through the sometimes unruly legislative bodies.
Dayton’s top policy advisers have been meeting regularly and touching base with legislative committee chairs, who will be vital to the success or failure of the effort.
Legislative committees will begin holding hearings on the streamlining measures this week.
Minnesota Democratic lawmakers neared a breakthrough in a year-long deadlock on raising the state's minimum wage from one of the nation's lowest to one of its highest on Monday night.
If they can work through other details, the state’s minimum wage would leap from $6.15 an hour to $9.50 an hour.
While the House and Senate still have a distance to go before the new wage becomes law, the move toward a $9.50 an hour wage floor marks a significant victory for advocates who have been campaigning for months to get the all DFL-controlled Legislature to back a major leap for the state’s wage floor.
On Monday evening, Senate negotiators on the minimum wage increase said they now support finding a compromise to raise the minimum to $9.50. Last year, the Senate backed only a more modest increase, while the House -- and Gov. Mark Dayton -- supported the higher level.
"This is the crux of the bill," said Sen. David Tomassoni, DFL-Chisholm. Tomassoni is a veteran lawmaker and a Senate negotiator on the minimum wage measure.
The deal is far from done.
On Monday night, House negotiators rejected the Senate's proposed hike because it included only the wage for big businesses and not other key parts of the measure.
"I just don't think we can take it piece by piece," said Rep. Ryan Winkler, DFL-Golden Valley. He told his fellow lawmakers: "usually every concession has a price."
Among the outstanding issues: whether the minimum wage should automatically go up with inflation, if employers should be allowed to pay young workers less than the minimum and over how many years the new wage should be phased in.
Senators, who have spent months enduring pressing from traditional DFL allies to back a large wage hike, said their move to support a $9.50 an hour wage for most employers took significant work.
"I don't understand why your can't support your own language," Sen. Chris Eaton, DFL-Brooklyn Center, told Winkler.
Leaving the committee after talks broke down, she said she was "shocked" that the House refused to go along with the Senate's move toward $9.50.
A bill that would allow Minnesota to join the states that want to change the way the U.S. president is elected advanced in a Senate subcommittee Monday.
The Subcommittee on Elections of the Senate Rules Committee approved the measure on a mixed voice vote, sending it to the full Rules Committee.
Sponsored by Sen. Ann Rest, DFL-New Hope, the bill is aimed at having the U.S. president elected by national popular vote rather than by a vote of the electoral college. It would do so by having states agree to award their electoral college votes to the winner of the national election. Currently 48 states award all electors to the candidate who wins the most vote in that state.
Supporters say the bill would end the threat of the 2nd place finisher in the popular vote winning the presidency, such as occurred in 2000, and would ensure that candidates compete for all votes, and not just in selected “battleground states.”
Ten states have passed the National Popular Vote law, but it would not go into effect until states with a majority of electoral votes have signed on, supporters say.
Opponents on the committee questioned whether such a change would affect the way presidential elections are run. Sen. Mary Kiffmeyer, R-Big Lake, a former Secretary of State, raised fears of multi-state recounts if the national election total was too close to call. Under the electoral college system, she said, such recounts are limited to a few states.
|Vikings (7)||Health care (1)|
|1st District (127)||2nd District (122)|
|3rd District (98)||4th District (72)|
|5th District (144)||6th District (516)|
|Funding (650)||Health care (211)|
|Minnesota U.S. senators (495)||Minnesota campaigns (1339)|
|Minnesota congressional (720)||Minnesota governor (1607)|
|Minnesota legislature (1841)||Minnesota state senators (776)|
|National campaigns (453)||President Obama (357)|
|State budgets (783)||Celebrities (1)|
|Anoka (1)||Fridley (1)|
|2012 Presidential election (320)||7th District (77)|
|8th District (186)||NHL news (1)|
|Gov. Tim Pawlenty (450)||Political ads (82)|
|Recount (95)||Gov. Mark Dayton (1124)|
|Democrats (923)||Republicans (1078)|
|Morning Hot Dish newsletter (49)||Sept11 (1)|
|Public safety (2)||Marriage Amendment News (1)|
|Voter ID News (2)||Budget news (4)|