Dayton says GOP tax plan would cut deductions for 900K Minnesotans

Gov. Mark Dayton on Monday harshly criticized the federal tax cuts being championed by President Donald Trump and Republicans in Congress, arguing they would undermine the nation's financial stability and also hurt many Minnesotans at tax time.

The DFL governor called a morning news conference to blast the GOP plan still in the works in Washington — particularly a proposed elimination of the federal deduction for income, sales and property taxes. Dayton said about 900,000 Minnesota families take advantage of those deductions, and that those families would stand to lose an average of $12,000 in deductions when they file taxes.

That adds up to about $12 billion for taxpayers across the state. Over the weekend, the GOP congressman writing the tax bill said the local property tax deduction wouldn't be scrapped after all; U.S. House Republicans planned to unveil their full tax proposal this week.

Nevertheless, Dayton called the prospect of sweeping federal tax cuts "a short-term giveaway that will whet people's appetites … [that] will undermine the fiscal stability of our nation and state's well-being."

Dayton said he would write to the state's three Republicans in Congress urging them to oppose any changes to federal deductions. Reps. Erik Paulsen, Tom Emmer and Jason Lewis last week voted with most of their fellow Republicans in favor of a budget resolution that paved the way for the party to move quickly in the coming weeks on the tax bill.

Dayton noted Monday that more than a third of residents in the districts of those three congressmen benefit from federal deductions on state taxes. He called the proposal in its totality "shamefully biased against lower- and middle-class families," and predicted that large tax cuts would harm the U.S. economy.

"President Bush's huge tax giveaways did not prompt a surge in economic growth; in fact, they were followed shortly by a seismic economic collapse, 'The Great Recession,' " Dayton said in a statement.

State GOP lawmakers said Dayton's pronouncements ignored broader benefits of the tax proposal.

Rep. Greg Davids, R-Preston, the chairman of the House Taxes Committee, said the governor chose to "cherry pick" one item in the plan that people might find concern with but didn't explain any other details of the bill, like an across-the-board boost to the standard deduction that Davids said would benefit more Minnesotans.

"He's looking at one side of the equation, but he's not being fair and honest when he doesn't even talk about the other side," Davids said.

Sen. Roger Chamberlain, the Lino Lakes Republican who chairs the Senate Tax Committee, countered Dayton's criticism by arguing that one way to make Minnesotans suffer less by losing state tax deductions would be to eliminate the state income tax altogether.

"How about we talk about getting rid of the income tax altogether, replacing it with a sales tax, a consumption-based tax," Chamberlain said in a video posted to the Senate Republicans' website.

Also Monday, Dayton thanked Minnesota farmers for their efforts to comply with a new water-quality law. At a separate news conference, he applauded progress on the state's buffer law, which requires land owners to plant stretches of vegetation along public waterways to help improve water quality and prevent erosion.

Nov. 1 marks the first major deadline for the law, and the statewide compliance rate already stands at 95 percent. "Minnesotans are taking their responsibility of cleaning our water and protecting it," Dayton said.

A few counties have lagged in complying with the buffer law, including four in western Minnesota where compliance levels are lower than 70 percent: Marshall, Grant, Rock and Watonwan. Dayton said some property owners have received extensions through July or November 2018, and officials expect they'll have a better sense of the progress on that work by spring.

Rep. Paul Torkelson, R-Hanska, who helped with revisions to the buffer law — including extending the deadline — said meeting the new requirements has been a challenge for some farmers.

"I'm glad we have the extension and wish it would have been longer," he said. "It's complicated for some landowners, and they need time to consider their options."

Erin Golden • 612-673-4790