Taxing, spending, cutting: Parsing the governor's budget

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

Today on the MPR News Update: Taking a deep dive on Gov. Mark Dayton state budget proposal. Also, Minnesota is setting some national benchmarks for Arctic weather, and some American Indian gang members go on trial.

LOOKING FOR SUPPORT: Committees in the Minnesota Legislature will start holding hearings Wednesday on Gov. Mark Dayton's new state budget proposal. The plan overhauls the state's tax code, erases the projected budget deficit and increases spending by $1 billion. Still, not all DFL lawmakers are fully embracing the document. At least, not yet.

PANNED BY REPUBLICANS: The plan calls for about $38 billion in spending over the two-year budget period -- roughly $1 billion more than the state was expected to spend. Republicans blasted Dayton's proposal as a job killer dressed as fairness. House Minority Leader Kurt Daudt derided it as a plan to create a better Wisconsin.

WHO TAKES A HIT? Among it's highlights, the plan cuts the sales tax rate from 6.875 percent to 5.5 percent, extends the sales tax to clothing costing more than $100 and increases income taxes on couples with taxable income of $250,000 or more. Single filers at $150,000 or more; the new bracket would be 9.85 percent, compared to the top rate now of 7.85 percent.

SALES TAX CHANGES: Broadening the sales tax base would help stabilize the state budget by providing a more reliable revenue source for funding public services, the administration argues. The tax changes would go into effect on Jan. 1, 2014. Here's a closer look comparing some of the sales tax changes.

EDUCATION FUNDING: Education officials in Minnesota are finding much to be happy about in the budget proposal. All levels of education, from preschool to higher education, would receive increases in funding under the plan, including "an additional $92 million in support for early learning," Dayton said.

LOCAL GOVERNMENT AID: Among the proposals in Dayton's budget plan are of number of changes to the state's local government aid formula and local governments' collection of property tax. He's proposing a property tax rebate of up to $500 to all homeowners, and an increase of $80 million in local government aid to municipalities. Gary Carlson with the League of Minnesota Cities joined All Things Considered to talk about the proposal.

YOUR THOUGHTS? We want to know, via Today's Question, What do you think of Gov. Dayton's budget proposal?

YAH, IT'S COLD: Among the coldest temperatures recorded Tuesday was 35 below at Crane Lake, Minn. The coldest location in the lower 48 states Monday was Embarrass, Minn., at 36 below. On Sunday it was Babbitt, Minn., at 29 below, according to the National Weather Service.

AND IT'S GOING TO STAY THAT WAY: MPR meteorologist Paul Huttner writes, "Temps across Minnesota this morning were anywhere from 10 to 20 degrees "less cold" than Tuesday, but it won't last long. Another arctic cold front is dropping south today, and you'll feel the sting as temps and wind chills drop again by tonight. The metro will plunge to between minus 10 and minus 15 degrees by Thursday morning. Northern Minnesota is in for another night of minus 30 degrees in most locations."

HOMELESS WORRIES: As the cold snap continues, advocates for the homeless say they are worried about the safety of people living without shelter in Greater Minnesota.

TRIBAL MOB: Three members of a violent American Indian gang known for terrorizing people from the Twin Cities to reservations in greater Minnesota, Wisconsin and beyond went on trial Tuesday in what authorities call one of the largest gang cases to come out of Indian Country.

CLINTON TESTIFIES: GOP lawmakers repeatedly questioned Secretary of State Hillary Clinton about whether she had seen requests for beefed-up security at the US consulate that was attacked last year in Libya. "I did not see these requests. They did not come to me. I did not approve them. I did not deny them," she said, while chiding Republicans for recently stripping $1 billion in security aid from the hurricane relief bill.

PATCHED: The alternative minimum tax or AMT has been patched -- permanently -- and several tax credits and deductions that technically expired at the end of 2011 were extended as part of the fiscal cliff legislation that Congress passed and President Barack Obama signed into law in January.

WANT TO SUPERSIZE THAT? New York City's limit on the size of sugary drinks is an "extraordinary infringement" on consumer choice, a lawyer for the American Beverage Association and other critics said in court on Wednesday. Opponents also are raising questions of racial fairness alongside other complaints.

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