Minn. Dems: Budget Deal Must Have Cuts, Tax Hikes
Minnesota House and Senate Democrats laid down a few markers Wednesday for the upcoming budget debate: They say a deal must include spending cuts, a redesigned tax system that draws more from the state's wealthiest and an on-time, no-government-shutdown guarantee.
The broad outlines offered by the leaders of the Legislature's Democratic majorities gibe with promises they made to voters in last year's campaign.
"It was clear they were tired of gimmicks and tired of ideological distractions in the face of real solutions for middle-class families across the state," said House Majority Leader Erin Murphy.
Setting expectations is the easy part, while the execution could prove more difficult - even though Democrats have full control of the Capitol power structure for the first time in two decades.
The Legislature and Gov. Mark Dayton face a $1.1 billion projected deficit. But past IOUs to schools and accounting shifts from prior budget repairs add to the fiscal problem.
At their joint news conference, Senate Majority Leader Tom Bakk and House Speaker Paul Thissen provided few specific details on how the taxes people pay and the services they get would change under their direction. In part, they are waiting on Dayton to submit his two-year budget plan on Jan. 22.
Dayton has long called for income tax hikes for the top 2 percent of earners in the state. Thissen acknowledged that recent federal moves to boost high-end income taxes adds a new challenge. Changes to the state's sales and property taxes also are in play.
Bakk said corporations that do business abroad should expect fewer exemptions on Minnesota taxes for their overseas earnings, whether those breaks worth tens of millions of dollars are scaled back or taken away in full.
Where the government's money ends up is as important as where it comes from, the leaders said. Some state programs will face cuts or be eliminated, they said, declining to elaborate on which ones.
Thissen said lawmakers want to figure out how to direct more money to early childhood education programs - state-supported, all-day kindergarten is a possibility - and higher education, which he called "one of the tickets to a better economy."
Bakk scolded Republicans for bragging about the most recent budget fix made without state tax increases, a deal struck after a nearly three-week government shutdown. It relied partly on deferring payments to schools and borrowing against a tobacco lawsuit settlement, which provided a one-time cash infusion but blew a hole in future budgets.
"Cool your jets a little bit. We don't think you were all that successful," Bakk said.
Senate Minority Leader David Hann stood by the GOP approach and said new curbs put on high-growth areas of the budget are paying off.
"We think this is a time for prudence and a time for caution," Hann said. "And not a time to blow out the budget with excessive spending."
If the Democratic majorities remain united, they don't need Republican votes to enact a budget.
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