House GOP budget plan cuts taxes, spending

House Speaker Kurt Daudt compared state government growth to family budgets during a news conference on the House budget targets. Tim Pugmire|MPR News

Republicans in the Minnesota House are proposing $2 billion in tax cuts as part of their two-year budget plan.

The budget outline House GOP leaders released Tuesday also spends nearly $40 billion, although they didn't include their recently announced transportation funding plan in that number. They put $100 million in the state’s rainy day fund and leave $319 million unspent.

Despite the state's projected $1.9 billion budget surplus, House Speaker Kurt Daudt, R-Crown, said during a news conference that Republicans are trying to reduce government spending.

“The bottom line is this: government spending cannot grow faster than family budgets,” Daudt said. “We set our budget target with that value in mind, and at the same time we’re going to show Minnesota that we can prioritize education, we can prioritize roads and bridges and we can prioritize protecting our aging Minnesotans’ way of life.”

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The Republican outline spends less than DFL Gov. Mark Dayton has proposed on education and health and human services.

Daudt said some of the proposed tax cuts would benefit businesses and some would benefit individuals, but he offered few specifics. He said the House tax committee will make those decisions in the coming weeks.

“Sending checks back is not something that we’re really considering,” he said. “We’ll likely want to target tax relief to help out Minnesota families.”

House budget committees will begin making decisions based on the new outline. Environment, Jobs and Economic Development and State Government Finance will face cuts. Other areas will see reductions in projected growth.

House Ways and Means Chair Jim Knoblach, R-St. Cloud, said the proposed spending on Health and Human Services is $1.1 billion below projections. He highlighted the need to better enforce the eligibility of people using state subsidized health care.

“We’re going to have a major initiative that saves hundreds of millions for the state by concentrating on Medical Assistance and of getting people off of Medical Assistance because they make too much money,” he said.

State spending would still increase under the House plan by 1.7 percent, a fact that triggered sharp criticism from some Republicans outside the Capitol.

Jake Duesenberg, executive director of the MN Tea Party Alliance, said the proposal was a slap in the face to conservatives who believe in smaller government.

“We need better voices up in St. Paul, or we need these people to start representing our view points,” Dusenberg said.

House Democrats were also quick to criticize the plan.

Minority Leader Paul Thissen, DFL-Minneapolis, said Republicans are trying to pay back corporate special interests.He also warned that the budget proposal is a recipe for a state government shutdown.

“Cutting taxes for millionaires and the wealthy by cutting services for our most vulnerable should offend the sensibilities of every Minnesotan, and it will, because it’s the wrong priority and frankly, it’s simply mean spirited,” Thissen said.

The Republican plan is about $3 billion smaller than Dayton’s budget proposal. Dayton is proposing more spending than Republicans in nearly every budget area but only $197 million in tax cuts. A spokesman said the governor is reviewing the GOP plan.

Democrats in the Minnesota Senate will release their broad budget outline later this week.