Gov. Dayton delivers up a broadside on state budget

Gov. Mark Dayton made an impassioned defense of his budget proposal and vision for Minnesota in his State of the State address Wednesday, blasting critics who don't offer solutions.

"Trying to cut our way to a better Minnesota is a failed experiment," Dayton said. "If you're interested in nothing more than throwing rocks and casting blame, send the rest of us a letter or a postcard."

Dayton spent much of his nearly hourlong address defending a budget proposal that would usher in the biggest tax overhaul in a generation but is also proving to be a harsh test for the new DFL leaders in both chambers.

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

The new sales tax proposals, particularly the taxes on business-to-business transactions, are triggering strong opposition. 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.

"No one likes paying more taxes, even when necessary to make them fair," Dayton said. "But when taxes are unfair, and remain unfair, not only do the people who are forced to pay more rightfully resent it, but they also lose faith in their elected officials who won't change it."

Speaking to a rare joint session of the Legislature, Dayton reaffirmed his support for legalizing same-sex marriage but stopped short of calling on legislators to pass a bill this year.

"I believe that every Minnesotan should have the freedom to marry legally the person she or he loves, whether of the same or other sex," Dayton said. "I want Minnesota to be a state which affirms that freedom for one means freedom for everyone, and where no one is told it is illegal to marry the person you love."

Before Dayton had even finished his remarks, Minnesotans United for All Families, the leading proponents of same-sex marriage, sent an e-mail to supporters urging them to thank Dayton "for his strong leadership in securing the freedom to marry in 2013."

Opponents called the governor out of touch.

"Minnesotans inherently understand that marriage is more than a government love license," said Autumn Leva, a spokeswoman for Minnesota for Marriage. "Authentic marriage is really about a personal promise with a public purpose that benefits everyone, especially kids, parents and our state's economy."

GOP says too little reform

Republicans renewed their intense criticism of Dayton's budget and the dramatic increases in some taxes they say will hobble the state's weak-kneed economic recovery.

"There's no reform, no improvement. We're just going to spend a lot more money to do essentially what we are already doing," said Senate Minority Leader David Hann, R-Eden Prairie. "He said we have a billion-dollar problem, and he said to solve that problem, we need $3.5 billion more in revenue. That doesn't make sense to me."

Dayton countered that GOP state leaders spent a decade trying to cut government as a path to financial stability and economic strength.

"How much lower will we reduce our spending for postsecondary education, either in real dollars or compared to other states?" Dayton asked. "Experts everywhere say that the quality and affordability of higher education is key to our future economic success. Does anyone believe that continuing to reduce our commitment to higher education is the path to a better Minnesota?"

Dayton ticked off reductions in other state services, including K-12 schools, hospitals and firefighters.

"Are we better off today after all those reductions in public services? I'd say no," Dayton said. He pledged that his budget would finally break the cycle of budget deficits that has plagued the state.

"The solutions to those deficits were very clear," he said. "However, they were also very painful; so they were postponed, then postponed again and again. Unfortunately, avoiding financial problems usually makes them worse. Fixing them then becomes even harder."

DFLers generally support Dayton's plan. The party's legislators praised the governor for not resorting to the one-time budget gimmicks that nursed the state through hard times but left it without cash and with a battered credit rating. DFLers say Dayton now must sell Minnesotans on the virtues of his plan.

A vision for the state

"He clearly laid out that vision without hemming and hawing, without particular hesitation, and he put it, then, to the people of Minnesota," said House Speaker Paul Thissen, DFL-Minneapolis.

Republicans insist the price is too high and called Dayton's plan a massive redistribution of wealth.

Hann said the tax revenue is going to the $500 rebate checks for every Minnesota homeowner, which he and other Republicans called an election-year gimmick.

Others said the speech highlights Dayton's focus on social issues over job creation and the budget.

"This was the most disappointing, pathetically partisan speech I've heard in 21 years," said Rep. Greg Davids, R-Preston. "He'd rather talk about gays getting married instead of getting Minnesotans jobs that could provide for their families."

Staff writer Rachel E. Stassen-Berger contributed to this report. jennifer.brooks@startribune.com • 651-925-5049 baird.helgeson@startribune.com • 651-925-5044