Dayton stands his ground on taxes with business groups

On his fourth day on the job, DFL Gov. Mark Dayton was all business.

Dayton, who campaigned as an unabashed, tax-raising liberal to the scorn of the Minnesota business community, spent Thursday afternoon lunching with the state's business leaders and the evening as the featured speaker at the Minnesota Chamber of Commerce's sold-out dinner.

"One of the great features of our democracy is that you and some of your friends can spend three and a half million to defeat me in an election and then, after it's over, invite me for dinner," Dayton joked in introduction at the 1,500-person chamber event.

But in his short time in office, Dayton has made clear he will engage his opponents, even as he stands his ground.

While the DFL governor was warmly received by the business leaders and even received a standing ovation as he appeared on the stage in the evening, he didn't pull any political punches. Dayton delivered a strong pro-tax message to the very people who are most doubtful of his conviction that higher taxes are the right answer and earned a hushed response.

Chamber officials made clear they wouldn't support him on raising taxes but would try to find common ground on other issues.

Both want a simpler, quicker regulatory and permitting process. Both want to focus on improving education. And both want more jobs for Minnesota.

"As he laid out his priorities in his inaugural address, many of the things he wants to focus on are similar to priorities we have at the state Chamber," said Andrea Walsh, chair of the Minnesota Chamber of Commerce Board and an executive vice president at HealthPartners. That's a different tune than business leaders were singing during last year's campaign.

The Minnesota Business Partnership and the chamber joined forces during the campaign to form MN Forward, a group that strongly backed Republican Tom Emmer.

"Mark Dayton's plan. It's enough to make you cry. ... Dayton wants to spend money like the out of control politicians in Washington," said one MN Forward-backed ad. "Minnesota can't afford Mark Dayton."

Showing no fear

On Thursday, Dayton showed no fear of addressing the issue of taxes directly at the chamber dinner, which was filled with business leaders, lobbyists and lawmakers.

The room laughed along with him.

Then, he plunged into the meat of his disagreement with the business crowd.

Dayton said he "shuddered" when he read one business group's claim that Minnesota is overtaxed. In fact, he said, the state's taxes have become more regressive and the state is about average in many tax categories. He said those who believe otherwise are "ignorant of those facts or indifferent to them."

He went on to say: "I appreciate that no one ever believes that they are paying less taxes or that they should pay more taxes."

Dayton laid out his belief that there is little choice but to raise taxes. The state is in such a deep deficit that killing all the state agencies would not fill in the budget hole, local property taxes already have jumped and investment in education has declined.

"Our shared solution is jobs," he said.

He closed, bringing the room to laughter again: "My office is always open to you. You don't even need to bring a protest sign."

As he left the stage, the audience rose slowly and gave the governor a restrained standing ovation.