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Daudt eyes half of Minnesota surplus for tax relief, says gas tax hike 'off the table'

GOP Speaker Kurt Daudt suggested that half of the $1.9 billion Minnesota budget surplus should go to unspecified tax relief and said Gov. Mark Dayton's proposed gas tax hike is "off the table."

By Patrick Condon

February 27, 2015 at 8:53PM

One Feb. 27, 2015, House Speaker Kurt Daudt called on the governor to return most of the surplus to taxpayers and end the call for a gas tax to fund transportation improvements. (Colleen Kelly — DML - Star Tribune/The Minnesota Star Tribune)

Democrats and Republicans at the Capitol agreed Friday that Minnesota's projected $1.9 billion budget surplus is great news for the state, but there was considerably less agreement on what to do with it.

"Today is good news for Minnesotans," said House Speaker Kurt Daudt, R-Crown, echoing comments by Gov. Mark Dayton and DFL legislative leaders.

But, where Dayton and DFL allies suggested greater spending on areas like education and transportation, the GOP's emphasis was as-yet-unspecified tax relief -- and the argument that Dayton now should jettison his proposal to raise state taxes on gasoline for transportation projects.

"I think this surplus means Democrats can stop talking about a gas tax in St. Paul," Daudt said. That's after Dayton said just a few minutes earlier that he intended to proceed with that proposal, which involves a new, 6-percent-per- gallon tax on gas at the wholesale level. Daudt said a portion of the surplus should be spent directly on rebuilding roads and bridges.

(The Minnesota Star Tribune)

Daudt was elusive about what kind of tax relief Republicans might pursue. But he suggested at least $900 million, or about half the new surplus figure, should be returned to taxpayers. Whether that might come in the form of wide-reaching relief, like an income or sales tax cut or rebate, or more targeted relief through tax credits or carve-outs to smaller subsets of taxpayers, he wouldn't say.

"Anything is on the table," Daudt said.

Various Republican lawmakers have already introduced bills tending toward the latter approach, with tax relief for businesses meant to promote new job creation, tax relief for farmers and other proposals.

Still, it was clear Republicans have their eyes on spending some portion of the surplus. Besides roads and bridges, Daudt and other GOP leaders expressed an interest in boosting state payments to nursing homes and spending more on schools, among other possible priorities.

"We will be proposing spending but it will be spending targeted at results," said Senate Minority Leader David Hann, R-Eden Prairie.

As new spending requests from interest groups flooded in via press release, Democratic legislative leaders said the new money available should be focused toward programs that aid working families.

"We hope to hear the priorities of communities across the state," said Senate Deputy Majority Leader Jeff Hayden, DFL-Minneapolis.

about the writer

Patrick Condon

Night Team Leader

Patrick Condon is a Night Team Leader at the Star Tribune. He has worked at the Star Tribune since 2014 after more than a decade as a reporter for the Associated Press.