DFL budget plan includes tax hike on top earners, spending cuts and K12 shift.
DFL House Speaker Margaret Anderson Kelliher and DFL Senate Majority Leader Larry Pogemiller announced a budget balancing plan that includes $435 million hike in income taxes on the state's top earners, a $1.7 billion accounting shift in school payments, nearly $300 million in cuts to local government aid, a $100 million cut to higher education, the elimination of the Political Contribution Refund and $147 million in cuts to Health and Human Services. The income tax hike would create a new 9.15 % income tax tier on married/joint filers who earn $200,000 or more a year. The current rate is 7.85%. DFL Sen. Tom Bakk also said it would accelerate the end of the tax cuts enacted under President Bush that are set to expire.
One interesting note is that the DFLers are contending that state statute requires the State Auditor would be forced to raise state property taxes if the state runs out of money. Gov. Pawlenty directed state agencies to review their funds for possible payment delays and cuts on Friday.
Pawlenty and Republicans in the Legislature remain firmly opposed to a tax increase of any kind.
Here's the full spreadsheet from DFL legislative leaders.
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