Dayton revises tax offer in hopes of reaching budget deal

Gov. Dayton tells reporters about his latest budget offer:

GOP legislative leaders react to Dayton’s proposal:

Gov. Dayton is revising his tax proposal with the hopes of convincing Republicans to accept some sort of revenue increase. Dayton has presented GOP legisaltive leaders with two offers. The first would create an temporary income tax increase on people making more than $1 million. It would also increase surcharges on hospitals and health plans and delay payments to schools.

The second option would raise cigarette taxes by $1 a pack, increase the health care surcharge and delay payments to schools.

Dayton said he was revising his budget plan with the hopes of convincing Republicans to accept some sort of revenue. Republicans quickly rejected the plan which prompted Dayton to say Republicans don’t support any proposal that increases revenue.

“If this is a step back, it’s their step back,” Dayton said.

GOP legislative leaders renewed their call for Dayton to call lawmakers back into a special session so they can pass a bill that would continue funding.

GOP House Speaker Kurt Zellers says the offer is a step backwards. He says Republicans campaigned on holding the line on taxes and spending.

“If that’s what we campaigned on and that’s what we were elected on, how do our members go back home and say we gave up all of our principles to the governor?” Zellers told reporters. “It’s not about wins and losses. It’s about keeping your word to the people who elected you.”

The sides are at odds over the best way to erase a $5 billion projected budget deficit. Dayton says ongoing revenue has to be on the table. Republicans say they don’t support any spending increases. The two sides are $1.4 billion apart on a two year budget.

Minnesota is in the sixth day of a state government shutdown.


Michael Brodkorb, spokesman for the Senate Republican Caucus and Deputy Chair of the Minnesota Republican Party, sent an e-mail to reporters pointing out that Dayton rejected a tobacco tax increase during the 2010 campaign for governor.

“You raise the price of a pack of cigarettes $1.50 as Mr. Horner proposed, that’s money out of the pockets of working people and poorer people, and that means kids don’t have as much to eat or don’t have the same quality of food. Those are addictions, and I think you treat addictions as addictions and you don’t penalize the people who are dealing with them economically.” Source: Smart Politics

For his part, Dayton said there are few viable alternatives left that would raise the amount of money needed to close the gap between him and Republicans.

“After the income tax there aren’t any good taxes in my view. But the only real sources of permanent revenue are property taxes, sales taxes and so-called sin taxes,” Dayton told reporters.

Here’s Dayton’s letter:


Here’s what Dayton says his $1.4 billion in added revenue will protect: