DFL legislative leaders have introduced a plan to increase income taxes for the state's wealthiest residents to help fill a nearly $3 billion deficit. Another part of the plan calls for $2.5 billion in cuts. Here's a look at the plan, which the House and Senate plan to vote on Monday.
A NEW INCOME TAX BRACKET
-- Minnesota married/joint income tax filers earning more than $200,000 a year after deductions and exemptions would have to pay 9.1 percent on money earned over that threshold. For example, a couple with an adjusted gross income of $350,000 would pay 7.85 percent of $200,000 plus 9.15 percent of $150,000 in state income taxes.
-- The fourth-tier income tax bracket would go away in 2013, but only if the state's February revenue forecast that year shows the state has a $500 million surplus.
-- Federal income tax cuts that are set to expire would expire a year earlier in Minnesota, helping the state collect additional revenue.
-- DFL leaders say 75 percent of the revenue generated under the plan will come from couples earning more than $500,000 a year.
The tax proposal will add about $435 million in new revenue
SCHOOLS PAYMENT SHIFT
-- The DFL plan calls for a $1.7 billion accounting shift to K-12 schools to help fill the budget hole. DFL leaders said the new tax revenue would help pay back the money borrowed from the schools.
The DFL budget plan includes about $2.5 billion in cuts. Here's a rough breakdown:
-- Nearly $300 million in cuts to local government aid
-- $147 million in cuts to health and human services
-- $100 million cut to higher education
-- Eliminating the Political Contribution Refund, saving $10 million
-- $43.8 million in cuts to environment and energy programs
-- $3.7 million in cuts to various state agencies
-- $3.3 million in cuts to transportation
-- $1.5 million in cuts to economic development and housing
-- $985,000 in cuts to the Minnesota Department of Agriculture
A detailed spreadsheet of the DFL's budget plan can be found here.
(MPR reporter Tom Scheck contributed to this report.)