Dayton’s new plan: higher taxes on wealthy and on cigarettes (VIDEO)

Dayton’s revised budget plan from tommy scheck on Vimeo.

Gov. Mark Dayton’s revised budget plan relies on higher income taxes for the state’s top earners and an increased cigarette tax to erase a projected deficit and increase spending for education.

The DFL governor announced details of his revised plan today.

It does not include a sales tax on services and does away with Dayton’s earlier $1.4 billion plan to give homeowners a $500 property tax credit. The new plan also does away with a tax cut for businesses the governor had originally proposed in January.

Increasing taxes on the wealthy is a matter of fairness, Dayton said at a Capitol news conference.

“The most regressive state and local tax is the state’s personal income tax,” he said. “Therefore my persistent efforts to add a forth tier to the state income tax, which would raise taxes only the top 2 percent of earners, would reduce the current unfairness whereby middle income taxpayers in Minnesota pay a 26 percent higher share of their incomes in state and local taxes than do the top 1 percent.”

Republicans are criticizing Dayton’s call for increased taxes. They said Dayton should cut spending to address the projected $627 million two-year budget shortfall.

“I think it’s time for the people of Minnesota to weigh in on all of the taxes and just ask the question, do you need high taxes to grow the economy? We don’t believe so,” said Senate Minority Leader David Hann, R- Eden Prairie.

GOP react to Dayton budget plan from tommy scheck on Vimeo.

Dayton said if Republicans have an alternative they should lay out exactly what they would cut.

Dayton’s budget proposes spending an additional $640 million in education. He said his plan would provide access to early education for 10,000 young children, fund all-day kindergarten for 46,000 kids, and increase school funding for every district in the state.

His budget would also increase direct student aid for post-secondary students, and increase funding for the MnSCU system and the University of Minnesota.

Dayton’s plan also increases spending for economic development programs by $86.5 million.

  • Charles Oakes

    Why must we always need to hear what the losers think? The Governor won the election. He and his DFL majority legislature are the ones we chose to set present public policy. If we don’t agree with him, then we should run against him next time. But until then, it is not news to hear that the Republicans don’t agree with him. They didn’t win the elections and their negativity is irrelevant for now.

  • Nicholas Kraemer

    Despite what Mr. Oakes thinks, it is in the best interest of the Democrats to at least listen to what the Republicans have to say for two reasons. 1) The party in power today will not be the party in power forever. 2) If the Democrats want to pass a bonding bill (and they do) they will need Republican support since it requires a 3/5 majority.

  • Charles Oakes

    In my humble opinion, the minority party just disagrees to disagree. It is not news and it is not helpful toward compromise. The same was true when the Republicans were in power. No meaningful discussion has occurred through press releases. And it is not news that they disagree.

  • FH

    Why is it always about increasing spending. When do we actually see if the money we are spending is being used wisely. Anytime it looks like things are getting a little better, the chorus for more spending starts.

    As a country we spend more per capita in most areas: education, healthcare, etc. than other countries and our results are worse. Let’s not contribute to the shortfall by increasing our spending. Let’s balance the budget, and force government to get more efficient with how they use their money. We in the private sector have had to do this, and it is working.

    If we analyze the increase in government spending, we would see that much of the increase in spending in education and other areas is not going to more services, it is going to increasing pension and healthcare costs. Government should have the same benefits as private pay, especially since they are funded by taxpayers. Let’s put everyone on the same retirement and healthcare plans (especially since the average government salary is higher than the average private sector salary), and then see how much money is freed up to help with services rather than raising taxes and increasing our spending.

  • larry

    I’m so glad he dropped many of the taxes, especially those on services, having taxes on car repairs is terribly regressive. However, I wish he would have kept the sales tax on expensive clothing. The Mall of America was given much support and tax breaks to build in the first place and it would be great to get more back from the state’s investment.