Dayton envisions a new 'greatness'

Faced with a massive projected budget deficit, Gov. Mark Dayton on Wednesday called for more and better targeted spending on education and transportation and higher taxes on the wealthy in his first State of the State address.

Dayton drew a sharp line between the "fiscal mess" he inherited and the vision he said could return Minnesota to its "former greatness." Speaking before a joint session of the GOP-controlled Legislature, the DFL governor also asked legislators to pledge that they would not shut down state government, as happened in 2005, but instead work out their differences.

"I ask you to remember that I was not given a blank slate on which to write my best proposals for our state's future," Dayton said. "Neither was the Legislature. We were left a horrendous fiscal mess, a decade of economic decline and state agencies poorly managed. We will, however, turn it around. ... By all of us working together, to get Minnesota working again."

The 40-minute speech painted a sharply negative picture of a state that had declined in the past decade, from its earning power to its overcrowded classrooms and pothole-marked roads. Those poor-performing years, he noted, were preceded by back-to-back cuts in state income taxes.

To those who would feel the pinch of the tax hikes he will propose next week as part of his budget package, Dayton said: "I ask Minnesota's business leaders and other most successful citizens to give us two years to turn this ship of state around -- not by savaging essential public services, upon which you and your employees also depend, but rather by transforming the ways in which government operates here in Minnesota."

'He didn't do that'

Republicans complained of Dayton's bleak assessment.

"He's making promises there, but I'm not sure he can keep them," said Senate Majority Leader Amy Koch, R-Buffalo.

She said Dayton's call for an anti-shutdown pledge was "odd," noting that Republican leaders had not raised the issue with the governor in numerous private meetings. But a Republican committee chairman last month held a hearing on shutdown procedures.

In the speech, Dayton promised to increase funding for K-12 schools and asked the Legislature to help him find the money needed to make all-day kindergarten an option for all students. "How can states like Alabama, Louisiana and Mississippi fund all-day kindergarten while we in Minnesota do not?" he asked.

He renewed his call for a $1 billion bonding bill that he said could put 28,000 Minnesotans back to work and make badly needed infrastructure repairs across the state.

"The notion we don't know how to invest in critical infrastructure improvements or to implement those projects efficiently is foolish," he said.

In their first month on the job, Dayton and GOP lawmakers have gone out of their way to work together, including regular breakfast meetings hosted by Dayton, but the ideological divide runs deep.

Dayton made higher income taxes for the wealthy a centerpiece of his campaign and will make it a key element of his proposal to close the state's projected $6.2 billion budget gap. "Some will criticize me for proposing next week to ask those successful businessmen and women and other wealthy Minnesotans to pay higher taxes," Dayton said in his speech.

Republicans, including party officials, derided his push and noted on Twitter that no one in the House chamber applauded his proposed tax increase.

Once the speech was over, Republican leaders set about their own solution. Three hours after Dayton left the House chamber, representatives passed a $900 million budget cut bill that Dayton had criticized as a "piecemeal" approach.

From jeers to cheers

As the head of state approached the House floor on Wednesday morning, a crowd of people holding signs chanted, "Hey, Dayton, here's the fix: Stop the cuts, tax the rich!" Dayton stopped his procession to reach over and shake their hands.

Senate Minority Leader Tom Bakk, DFL-Cook, called Dayton's speech "remarkable" and said its central theme could be boiled down to this: "Please help us invest in the future."

Minnesota labor groups -- public employee unions, the nurses' union and the Minnesota AFL-CIO -- praised the messenger and the message. Dayton in his address defended the work of public workers, including teachers.

"The good ideas for improvements and efficiencies often come from the people who work in government every day. Treating them with the dignity and respect they deserve will be essential to our success," Dayton said.

Staff writers Bob Von Sternberg and Eric Roper contributed to this report.