Dayton's budget: Key lawmakers take wait-and-see approach

Mark Dayton
Gov. Mark Dayton presents his budget proposal to the media Tuesday, Jan. 22, 2013 at the Department of Revenue in St. Paul.
MPR Photo/Jennifer Simonson

A day after Gov. Mark Dayton's proposed a sweeping tax and spending plan, Republicans at the State Capitol criticized his ambitious education budget for what it did not include -- money to deliver $1.2 billion in delayed payments to schools.

Also Wednesday, the people responsible for passing a tax plan -- the Democrats who chair the tax committees in the House and Senate -- took a wait-and-see approach to Dayton's proposed overhaul of the state tax code.

It's now up to the House and Senate tax committees to start digging into the governor's plan, which includes an expansion of the state sales tax base with a lowering of the rate, an income tax increase on the top 2 percent of earners, a reduction of the corporate tax rate and property tax rebates for homeowners.

State Rep. Ann Lenczewski, chair of the House tax committee, said her colleagues have a lot of homework to do. Lenczewski said she thinks it's too soon for her or anyone else to formulate too strong of an opinion.

"We're going to explore if there are better ways to do things."

"I think he has a good shot at getting a lot of what he's proposing," said Lenczewski, DFL-Bloomington. "And I think things that maybe aren't as popular with the Legislature will become apparent over time, as Minnesotans tell us -- as they come and testify what they don't like. I think legislators, they listen to their constituents and they care what they think. So, I think it will be part of the process."

In the Senate, tax committee chair Rod Skoe had high praise for the governor's approach to reducing property taxes. The proposal includes $500 property tax rebates to every homeowner, as well as a boost in state aid to cities and counties.

But Skoe, DFL-Clearbrook, was decidedly noncommittal toward Dayton's other proposals, particularly the sales tax expansion to clothing items above $100 and other goods and services that are currently exempt. Skoe would only say that he plans to take a good look at it.

"There's a reason that our founding fathers have a division between the administration and the Legislature," Skoe said. "That division exists, and we have ideas. I think the governor has indicated if we can figure out better ways of doing things, he's open to that. So, we're going to explore if there are better ways to do things."

Tax-averse Republicans don't see anything worth improving upon in the governor's plan. State Sen. Julianne Ortman, R-Chanhassen, said she thinks the Dayton budget proposal would hurt Minnesota's economy.

"It's definitely a blatant tax grab, tax increases disguised as reform," said Ortman, who chaired the Senate tax committee when the GOP controlled the chamber. "There's very little real reform in the governor's tax proposals. The budget is very disappointing because there are no reductions."

Another point of contention for Republicans is the governor's approach to education funding. Dayton wants to increase spending for K-12 schools by $300 million. But Dayton decided to wait another two years to try to pay back the $1.2 billion owed to schools from previous budget deals, even though House Democrats made a partial payback their first bill of the session.

State Rep. Kelby Woodard, R-Belle Plaine, said that omission was his biggest disappointment.

"We have over $2.3 billion in tax increases and we can't prioritize paying back the shift, paying back the previous debt that we have?" Woodard said. "It's just a matter of priorities."

Woodard contends that by not delivering delayed payments to schools, Dayton didn't meet his self-imposed standard of delivering a gimmick-free budget.

But state Rep. Paul Marquart, DFL-Dilworth, rejects that assertion. Marquart, the chair of the House education committee, said he still wants to send the payments to schools, but is also willing to follow the governor's timetable.

"Our commitment is still to try to pay back that shift as quickly as possible, but we're going to work with the governor with his budget, because I really like what I see in the governor's budget," Marquart said. "And we're going to work with that as far as the education and the property tax relief, and like I said, try to pay back the shift as fast as possible. But we've got a lot of priorities, and so we're going to take them one by one."

Marquart was generous in his praise for the governor's proposal, which he described as the most honest and future-looking budget that he's seen in a decade.

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