Dayton puts forward supplemental budget plan

Gov. Dayton is proposing a revised budget that would give tax breaks to companies that hire veterans and unemployed workers, restore some health care cuts and increase benefits for veterans.

Human Services Commissioner Cindy Jesson says the plan would restore cuts the governor and Legislature made last year to personal care attendants, medical research and emergency medical assistance.

“We chose to propose restoring these things because we see immediate risk of harm very much to people if we don’t take these steps.”

The governor’s spends an extra $60 million, which would be collected by raising taxes on corporations that operate overseas and by requiring online retailers like Amazon to collect and pay state sales taxes on purchases. Republicans in the Legislature have opposed efforts to close what some call a tax loophole for corporations that operate overseas.

Dayton said the current tax break for companies with overseas operations doesn’t make sense.

“Why do we want to give incentives to companies, big companies most of them, for putting jobs overseas rather than investing that money in the future of the people of Minnesota?,” Dayton said.

Republicans have been reluctant to raise taxes on corporations that operate overseas. They say companies would be less likely to hire workers in Minnesota if the law were changed.

Here are the details put forward by Dayton’s office.

Update:

GOP Senate Majority Leader Dave Senjem released this statement:

“Governor Dayton’s supplemental budget is a surprise and a shock,” said Senate Majority Leader Senjem. “We have managed Minnesota’s budget well in the past year from a $5 billion budget deficit to over a $1 billion surplus and the first thing the Governor wants to do is raise taxes. Embarrassing!”

The Governor’s “jobs” portion of this proposal actually costs $35 million and results in a temporary program. The bottom line is this: the Governor’s proposal is a temporary tax credit for a permanent tax increase.

In a letter last year, Joy Lindsay of the Minnesota High Tech Association Board said, “Minnesota’s foreign royalty deduction was enacted during the Perpich administration to encourage companies to invest in research and development in Minnesota which creates high-paying, high-tech jobs here.” Governor Dayton’s proposal would jeopardize thousands of technology workers’ jobs, whose average wages are much higher than the state’s average.

In addition to the permanent tax increase, the Governor is also recommending fee increases on hunting and fishing licenses.

“What we are doing is working for Minnesota,” Senate Majority Leader Senjem concluded. “I can’t believe the Governor wants to retreat to raising taxes with the surplus just announced.”

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