Gov. Mark Dayton will strongly defend his new budget proposal in his State of the State on Wednesday night, challenging critics in both parties to offer a better plan.

“I want to offer my budget as the beginning of moving forward and cleaning up the past messes,” the DFL governor said Wednesday.

Dayton’s new budget proposal would wipe out a $1.1 billion budget deficit, provide direct property tax rebates for homeowners and boost money for education. To pay for that, Dayton wants to raise income taxes for the wealthy and dramatically expand the sales tax to include clothing and many services, including business-to-business transactions.

Critics have come out strongly against the new sales taxes, particularly the taxes on business-to-business transactions. If legislators reject that portion of the proposal, it would blow a sizable hole in Dayton's budget and prevent him from paying for many of his most prized initiatives.

Dayton has said there are many parts of his proposal he doesn’t like, but he can’t find a better solution. Nobody has come to him with better ideas, either.

“I still don’t see a plan C, and I am waiting,” Dayton said.

Republicans and some business leaders say the tax hikes will crush the state’s already fragile economic recovery. GOP legislators highlight that the improving economy is already lifting the state budget out of its crisis and continues to do so thanks in part to their refusal to raise taxes the last few years.

The governor said that without meaningful changes to the tax system, the state won’t begin to make up for years of budget reductions and lack of investment in education and economic development.

Doing less, Dayton said, “Isn’t going to move us ahead.”

The governor plans to lay out his vision in the speech so that “we can have the quality of life, have the full employment, and all the other things that people want, need and deserve.”

Dayton will speak at 7 p.m. from the Minnesota House Chambers.