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Dayton's Budget Proposal

Posted at: 01/22/2013 6:37 PM
Updated at: 01/22/2013 6:51 PM

Governor Mark Dayton laid out a plan of spending cuts, tax reform, and investment to balance the next two year budget.

Along with investment in K-12 education, higher education, and job creation, the governor is proposing property tax relief.

He wants to give homeowners a $500 tax rebate from their property taxes paid from 2013 and forward. He also wants to lower the property tax rate for homeowners by almost 15%.

As part of the budget numbers for 2014-2015 that were presented on Tuesday, Dayton said he would also bump financial aid for students who are using state grant programs at the colleges. And he would increase funding by $823 per pupil in the Duluth schools.

His numbers said the average family in St. Louis County would receive a tax cut of $516.

So how would he pay for these ideas?

A tax increase on the Minnesota couples earning $250,000 or more, or $150,000 as a single, which he said make up about 2% of the population.

A sales tax on clothing that costs $100 or more is also being proposed.

Co-owner of Main Street Fashions for Men, Doug Melander, said that feels that the cut off level of $100 may benefit discounters. "Some people may feel like they're being penalized for buying something nicer, something perhaps made in the United States, rather than overseas," he said.

Other proposed increases include a higher cigarette tax, and taxes on business services such as legal, accounting, specialized design, and business support services.

However, Dayton said that the overall rate of the sales tax would go down. So in summary, Minnesotans would be paying $0 more in sales tax.

Dayton acknowledged he's going to face an uphill battle with his proposals. But he challenges others who don't like his plan, to come up other ideas.

He said this plan would make up for the $1.1 billion dollar deficit the state is facing now.

Area lawmakers said they like how it's a first step, and although they don't agree with everything, it is something they can start discussing.

The Republicans in the Senate panned the plan, saying it would raise taxes on all Minnesotans.