Dayton wants to spend surplus on broadband, one-time expenses

Tim Pugmire | MPR News

Updated 4:10 p.m. | Posted 11 a.m.

  1. Listen Dayton adds pre-K, broadband, racial equity money to budget plan | By Tim Pugmire

    March 15, 2016

Proposals needing one-shot doses of state money rose above those with a continuing price tag in Gov. Mark Dayton’s plan for spending the projected $900 million budget surplus, a blueprint he delivered to the Legislature on Tuesday.

Dayton declined to recommend use of the entire surplus in his update to the two-year budget adopted last spring. Of the nearly $700 million in new spending suggestions, more than $400 million would pay for things that don’t build in long-term obligations for the state, such as $100 million for broadband expansion grants and $39 million for cybersecurity split between a state technology agency and a data-breach detection initiative housed at the University of Minnesota.

His list of $100 million in spending and grants aimed at tackling racial economic disparities and business opportunities in minority communities would also be confined to single infusions.

As promised, Dayton proposed creating a new prekindergarten program operated by charter schools and school districts. But that would consume only $25 million of the budget surplus because it wouldn’t dramatically ramp up until the 2017-18 school year given that many schools are setting next year’s budgets now. In the following state budget, it would require $100 million in state support.

“We stand ready to work with legislators of both parties to enact a supplemental budget that is fiscally responsible,” Dayton told reporters as he unveiled his proposal Tuesday. “I’m flexible on all this. But I’m not flexible on the principle we need to be cautious.”

The second-term Democratic governor did propose some tax breaks, but at a far smaller scale than what legislative Republicans intend to pursue.

Dayton’s suggested $117 million in tax relief is mostly in the form of targeted credits, including his renewed pitch for making 92,000 more families eligible for child and dependent care credits as well as boosting the availability of K-12 education credits and the working family tax credit.

House Republicans are pushing for significantly bigger tax cuts. They passed a $2 billion package last session. House Speaker Kurt Daudt said he thinks the governor’s plan is out of whack. Daudt said there’s too much spending and not enough tax relief.

House Republicans will push for tax relief aimed at middle-class families, college students and senior citizens, said Daudt, R-Crown. Their proposed elimination of the state tax on social security income would be phased in over several years.

Minnesota lawmakers entered their session measuring expectations from groups eyeing a slice of the surplus. A February economic forecast shaved one-fourth off the anticipated surplus and prompted warnings that the economy could easily slip into trouble. Dayton and other leading lawmakers have said the shaky outlook demands a cautious approach this year.

Minnesota does have a healthy rainy-day reserve, now almost $1.6 billion.

Some items in Dayton’s proposal go toward costs deemed unavoidable.

That includes more than $11 million to make changes to the Minnesota Sex Offender Program that has come under federal court pressure. Similarly, the governor proposed more than $22 million to enhance security and staffing at the Minnesota Security Hospital and $28 million for a state-run community services program that provides residential and vocational support services for people with disabilities trying to lead independent lives.

Dayton didn’t put money toward rate increases for long-term care providers, who have been lobbying hard to increase allowances for those serving elderly and disabled clients. His plan does, however, include a 5 percent bump for primary care and mental health providers who serve people on publicly subsidized health programs.

Additionally, Dayton would use a combination of state dollars and federal grants to increase cash-assistance grants to people in the state welfare program by $100 a month, which would be the first such boost since 1986. The push has had bipartisan backing.

The 50-page roster of programs includes several things with relatively small costs that Dayton still considers to be big priorities. Among them are a $300,000 grant to do extra tourism marketing for Mille Lacs Lake, which saw its flagship walleye fishing season cut short last summer over concerns of a depleted population of the species. The plan includes almost $200,000 to help operate a yet-build fish hatchery station on the same lake.

Other proposed items include:

  • $500,000 to study single-payer health care
  • $230,000 to look into contaminants in drinking water and how the state can help communities address them
  • $300,000 toward the design and development of a child care facility on the Capitol Complex, saying state employee satisfaction survey have indicated a need

Lawmakers are expected to come forward with their own proposals as the session drives toward a May 23 adjournment deadline.

House Majority Leader Joyce Peppin raised concerns about the added spending in the governor’s proposal. Pepin said early childhood education, for example, received a significant increase in the current budget. She also thinks the governor’s proposed broadband spending is too high.

“(I’m) a little surprised that there’s so many additional requests for dollars, when really our goal is to provide tax relief,” said Peppin, R-Rogers. “We feel Minnesotans have been taxed enough, and we would really prefer those dollars to go to tax relief.”

Democrats praised Dayton’s plan. Senate Majority Leader Tom Bakk, DFL-Cook, said the proposal matches many of the priorities that his caucus has for the session, including equity for workers and families.

MPR News Reporter Tim Pugmire contributed to this report.