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Governor Mark Dayton has rolled back a proposed income tax increase after state finance officials announced a slightly smaller budget deficit for the next biennium.  He's also pledging to spend $200 million on programs he proposed to cut.

The latest economic forecast released today shows the projected deficit shrunk from $6.2 billion to $5 billion, due to an increase in state revenues. Dayton is still proposing an income tax increase on top earners, but he eliminated an additional 3 percent surtax on people earning more than

"That was always intended to be temporary," Dayton said.  "I'm delighted that this revenue picture permits it to be extremely temporary, and would reduce then the top rate that I'm proposing to the 10.95 percent in the so called fourth tier. And it reinstates the pledge I made that Minnesota's top rate as I proposed it would not be the highest in the nation."

Dayton is reducing several spending cuts in his budget for programs like nursing homes, fire safety and transit funds.  His budget now has about $765 million in permanent cuts.  He is proposing to raise $3.2 billion in tax hikes, surcharges and fees.

Here are Dayton's proposed budget revisions:

Politics and Government News

Dayton revises budget plan

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