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Education big winner in Dayton’s updated budget plan

Gov. Mark Dayton announced his supplemental budget on Mar. 17, 2015. Tim Pugmire | MPR News

Weeks after state officials announced a huge jump in Minnesota’s projected budget surplus, Gov. Mark Dayton Tuesday unveiled how he wants to spend it. Education would see the biggest boost.

On Tuesday, he proposed spending $343 million to fully fund full-day pre-kindergarten for every 4-year-old in Minnesota. He held fast to that plan despite pleas from legislators and others to focus on targeted scholarships. He also called for a $41 million hike in special education funding.

Dayton’s plan is sure to meet resistance from Republicans, who’ve been pushing for more tax relief.

The governor said the state used surpluses to cut taxes 15 years ago, and it proved to be the wrong approach over time.

"Within two years, those surpluses disappeared. It's taken us over a decade to recover from those mistakes," he said. "Furthermore if we 'give it all back,' there's nothing left to invest in Minnesota."

House Speaker Kurt Daudt, R-Crown, said House Republicans are still working on their plan for how much to spend and how much to cut taxes. He renewed his call for Dayton to drop his push to increase the tax on gasoline to fund road and bridge projects.

"It doesn't necessarily surprise me that the governor wants to spend all of the surplus and then on top of that, it's a bit ironic then, that to pay for his priority he wants to raise another tax," Daudt said.

One area where Daudt said Republicans will spend more money than Dayton is on nursing homes. Dayton is proposing a $25 million increase.  Daudt said Republicans will spend $160 million on nursing homes.

While there will no doubt be budget fights, the overall picture is relatively bright. The forecast from Minnesota Management and Budget released in late February showed the state's previously forecast $1 billion surplus for the next biennium has jumped to nearly $1.9 billion.

Dayton had already proposed spending increases in his January budget request. Tuesday’s proposal was a supplemental package that took into account the new forecast and bigger expected surplus.

Beyond early childhood education, Dayton also proposed more spending in these areas:

  • Higher education. The governor's plan includes money to freeze tuition at the University of Minnesota and Minnesota State Colleges and Universities, although MnSCU would have to also provide some money.

  •  Nursing homes.  Dayton is proposing a $25 million hike to nursing homes, significantly less than the $200 million industry was seeking. The governor said he anticipates the Legislature will go higher, and he's open to that.

  • Public works bill.  Dayton's budget includes enough money to service debt from an $850 million bonding bill this year to fund public works projects.

  •  Tax cuts. Dayton budget includes $200 million in tax cuts. Dayton said he was open to additional tax cuts but remains "concerned about permanent tax cuts."

  •  Welfare. Dayton is proposing a $68 million increase in welfare grants. That equals $100 more a month per person family.

  • Park board restored. Dayton restores funding to the Minneapolis Park Board after board after the agency settled its dispute over the route of the proposed Southwest Corridor light rail line.

With a $183 million budget reserve, Dayton's revised plan leaves only $13 million of the projected surplus unspent.

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