House Republicans plan tax breaks, more road spending in budget priorities

Republicans in the Minnesota House said Monday they're aiming to pass a $46 billion budget for the next two years, focused on new tax breaks, more spending on road projects and cuts to state agencies.

Lawmakers are still refining specific spending plans in House committees, but Republican leaders of those committees are all aiming for the same targets, including $1.35 billion in tax cuts or credits and $450 million in new spending on roads and bridges. Republicans are also looking to cut nearly $600 million from the state's Health and Human Services budget, more than $21 million in environment and natural resource spending and another $90 million from state government operations and veterans programs.

House Speaker Kurt Daudt and other GOP leaders said they intend to spend more money on education and public safety. But a primary goal is directing the bulk of the state's anticipated $1.65 billion surplus back to residents and businesses in the form of tax breaks.

"We know how hard (Minnesotans) work to generate our state's significant surplus, and for that reason our budget represents a $1.35 billion tax cut that will go back in the pockets of Minnesota families," he said.

Daudt, R-Crown, said that tax cut is unlikely to come in the form of an overall reduction to tax rates. Instead, it will likely be targeted to specific groups, like farmers or businesses.

Rep. Jim Knoblach, R-St. Cloud, the chairman of the House Ways and Means Committee, said the GOP will not try to remove the tax increase Gov. Mark Dayton and fellow DFLers approved on the state's highest earners a few years ago. He said it will also avoid across-the-board cuts to government agencies — a strategy Dayton had said would prompt a veto.

Knoblach said lawmakers should be focused on reducing the size of some state government operations because cuts from the federal government could force reductions in the near future.

The House proposal leaves about $26.6 million to stash away in the state's reserve fund. The House Republicans' budget announcement follows a similar move by Senate GOP leaders last week. The Senate plan includes $900 million in tax cuts and similar spending increases in transportation and education. It also targets environmental and natural resources operations as a key area for cuts.

The governor's updated budget plan, released last week, would spend a near-equal amount of money — about $46 billion — to the House GOP plan. It includes a smaller tax cut and more spending on schools, including expanding prekindergarten programs. Other recent updates include $3 million for a rail line expansion between St. Cloud and the Twin Cities, among other priorities. The governor's plan would leave about $200 million to save for future expenses.

In a statement Monday , Dayton said it was "impossible" to respond to the House Republicans' proposal, because it included few specifics.

"When the Committees start making these numbers real, we will then have something to discuss," he said.