Senate DFL outlines $789 million supplemental budget proposal

Glen Stubbe/Star Tribune
Senate DFL leaders and staffers emerged from a meeting just before releasing their 2016 budget targets.
Minnesota would spend more on aid for cash-strapped cities and counties, on new equity proposals and installing high-speed Internet in rural areas under a new proposal by Senate DFLers.

Senate leaders presented their plan Wednesday, laying out spending priorities largely in line with DFL Gov. Mark Dayton but starkly different from Republicans who control the House.

Senate Democrats proposed spending nearly $800 million in new money, about $100 million less than the state's projected budget surplus. Of that, $300 million would go to increase aid to local governments, for debt relief for college graduates and to help fund paid leave for workers.

Senate Majority Leader Tom Bakk, DFL-Cook, said the budget priorities are intended to safeguard the state's fiscal future in the face of a weakening economy. Bakk and Dayton scaled back more ambitious spending plans after a recent state forecast lowered the projected budget surplus from $1.2 billion to $900 million.

Calling it a "very responsible proposal," Bakk contrasted the Senate plan with House Republicans, who are pushing back against large spending increases less than a year after the Legislature approved the current $42 billion budget in an acrimonious session that went into overtime.

The Senate proposal reveals the gulf between Democrats and Republicans with 40 days left until adjournment. Because the state is in the middle of a two-year budget cycle, no dire consequences like a government shutdown are looming if they can't reach a deal. The clock could simply wind down on the session without any agreement, sparing legislators from painful compromises as they head into an election season with all 201 seats on the ballot.

House Republicans last week outlined a smaller plan for the second half of the current two-year budget cycle. Their plan basically holds state spending flat, cutting $9.5 million from the budget to pay for other new spending.

Bakk and other DFL leaders say they will vigorously oppose long-term spending proposals that would potentially blow a hole in the budget in coming years. "We want to make sure that this proposal in total, including our tax provisions, is structurally balanced," he said.

A comprehensive transportation package was not included in the Senate DFL's budget targets, but a transportation plan could come in a separate proposal. Bakk has opposed calls by Republicans to tap into the state's general fund budget to pay for roads and bridges, arguing that such work requires dedicated, ongoing funding in the form of gas tax. Republicans say that with a large state budget surplus, legislators should use some of that money instead of approving a gas tax increase.

"Everyone has said that transportation is a top priority; it is time for the rhetoric to stop and the solutions to start," House Speaker Kurt Daudt, R-Crown, said in a statement. "House Republicans remain committed to fixing our road and bridge infrastructure and providing tax relief to middle-class families this session."

A call seeking further comment wasn't returned Wednesday.

Dayton's administration blasted Daudt's comments, saying the House GOP plan is to raid other programs to pay for transportation.

Zakula said the GOP proposal relies on "shifts and gimmicks" that would result in cuts to schools, health care and public safety.

Senate Republicans criticized Senate DFLers' budget targets, calling them "reckless and unsustainable," particularly as the state budget agency reported tax revenue has recently fallen shy of projections.

"Today the Senate DFL answers with $800 million in new spending, eating up the entire budget surplus," Senate Minority Leader David Hann, R-Eden Prairie, said in a statement. "This is on top of the $2.1 billion in additional spending approved in last year's budget. Their earlier rhetoric on being cautious gave way to new spending that balloons in future years."

The total amount of additional spending DFLers proposed Wednesday is $789 million, with as much as $340 million in one-time spending, said Sen. Dick Cohen, DFL-St. Paul.

Cohen, chairman of the Senate Finance Committee, said the recent state economic forecast was "disquieting" and said it motivated Senate Democrats to be cautious about proposing too much in ongoing state spending.