Dayton: Tax cuts caused Minn. economic problems

State of the State
Minnesota Gov. Mark Dayton greets well-wishers after his state of the state address Wednesday, Feb. 6, 2013 at the State Capitol in St. Paul.
MPR Photo/Jennifer Simonson

Gov. Mark Dayton argued in his State of the State speech Wednesday that past state income tax cuts are partly to blame for chronic budget problems in Minnesota, saying political leaders cannot afford to keep delaying difficult tax and spending decisions.

"In the decade after Minnesota's income tax reductions, our economy fared worse than the nation and most other states," Dayton said, according to a draft of the speech provided by his office prior to its delivery before a joint session of the Legislature. Former Gov. Jesse Ventura and the Legislature cut state income tax rates in 1999.

Dayton said those income tax cuts along with a weak national economy were to blame for regular budget deficits in Minnesota. Dayton used his speech, an annual tradition, largely to pitch his proposal to hike state income taxes on the wealthy and expand the state sales to more purchases.

"Unfortunately, avoiding financial problems usually makes them worse," Dayton said. "Fixing them becomes even harder."

Enacting his tax and spending proposals would eliminate the latest, $1.1 billion deficit, make investments in schools and other priorities, and leave a surplus by 2015. He suggested Minnesotans are not satisfied with Republican calls for the state to balance its budget without raising new tax revenue.

"Trying to cut our way to a better Minnesota is a failed experiment," Dayton said. The governor's budget proposal has had a rocky early reception from state business leaders and even some Democrats, and its success or failure in the coming months is likely to set the tone for the rest of his term as he looks to a 2014 re-election bid.

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Dayton also endorses legal same-sex marriage in his speech, in remarks likely to echo through the Capitol if lawmakers take up the issue this spring as widely expected. While acknowledging the issue is "controversial," Dayton says he believes "every Minnesotan should have the freedom to marry legally the person she or he loves, whether of the same or other sex."

While Dayton has previously endorsed legal same-sex marriage, he had been reluctant to wholeheartedly endorse a legislative push on the issue in 2013. Including it in his State of the State speech is likely to hearten activists preparing to push the issue at the Capitol.

Dayton also suggests a change in how the Legislature operates. He said that sessions in even-numbered years should be an "unsession" that is mainly devoted to eliminating unnecessary laws, rules and regulations. He said he would direct state agency heads and legislative staff to start preparing lists of laws and regulations that could come off the books.

He said that would be an effort to eliminate outdated provisions "which make government nearly impossible to understand, operate or support."