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Continued: Dayton's new plan: 'Tax the rich,' leave sales taxes alone

Dayton is dropping his plan to give every Minnesota homeowner up to a $500 annual property tax credit. That would have cost the state $1.5 billion over the next two years.

“I still think property tax relief is very important, [but] this doesn’t allow us to do as many things as we would with a broader reform,” he said. “That’s the way it is.”

The new plan from the governor also lacks the funds to speed up repayment of the so-called school shift, a key priority among House members, particularly. Adopted during bad budget years, the shift changed the dates the state gave aid to public K-12 schools. Shifting the payment dates makes the state’s budget calculations a little rosier.

The governor’s previous budget had fully repaid that shift, now worth $808 million, by 2017. Now, under his plan, schools will have to wait until better economic times to see payments revert to their regular pattern.

Democrats in the House say that’s not good enough. “We would like to pay back the school shift this year,” said House Speaker Paul Thissen, DFL-Minneapolis.

Despite losing $2 billion in revenue compared to his first budget proposal, Dayton found some new programs worth funding in the latest version of his budget. He added $18 million to his spending plans to offer renters tax relief and would give the state’s Office of Administrative Hearing a one-time $60,000 boost to cover the cost of dealing with increased campaign-related complaints.

The governor even made changes to his spending plans on Wednesday night. Katharine Tinucci, the governor’s spokeswoman, said he was so moved by his visit Wednesday with United Way officials that he added in millions more in spending to domestic-violence and homeless-youth programs.

“We are very excited,” said Kenza Hadj-Moussa, communications director for the Minnesota Coalition for the Homeless, of the $5 million the governor added for homeless youth. “That program has been underfunded for years [but] it is still shy of the need.”

 

Rachel E. Stassen-Berger Twitter: @rachelsb

  • Dayton’s new budget proposal

    • Abandons a $2 billion plan to lower sales taxes and extend them to services

    • Drops a $1.5 billion property tax credit for homeowners

    • Increases taxes on the top 2 percent of Minnesotans, raising $1.1 billion

    • Spends $640 million more on education programs

    • Adds $120 million to the state’s current aid to cities

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