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Minn. Top Earners See Higher Taxes in New Budget

Posted at: 03/16/2013 4:37 PM
Updated at: 03/16/2013 6:14 PM
By: Travis Dill
tdill@wdio.com

Governor Mark Dayton adjusted his budget proposal Thursday. Revenue Commissioner Myron Frans explained those changes during a town hall meeting at UMD on Friday night.

Commissioner Frans spoke to over a dozen citizens Friday night, when he detailed investments the governor wants to make in job creation and education. All-day kindergarten is just one of those proposed investments.

Frans addressed how that can happen when the state is facing a $627 million deficit.

“How do we make this pay? The first component is the 4th tier, the 4th income tax tier would apply to the top 2 percent,” Frans said.

A tax increase won't affect 98 percent of Minnesotans, but it would hit families with household incomes over $250,000 and single taxpayers making more than $150,000.

The 4th tier's tax rate would increase from 7.85 percent to 9.85 percent under the proposed budget.

Frans had bad news from homeowners hoping to get property tax relief.

“The property tax relief, we did pull back on the property tax rebates. We didn't find a lot of support for that,” Frans said.

Proposed increases to city and county aid should help the property tax problem from growing according to Frans.

At the town hall meeting Craig Guzzo, a Duluth business owner, was upset about the state's confusing property taxes. He said he was unhappy that local schools are requesting levies when 33 percent of his state property tax is supposed to fund them.

Guzzo said he wanted reform so citizen know where their taxes go.

“The gentlemen that were there tonight talked about that. It has to be looked at a little bit, and it definitely has to be reformed. And that's not going to happen overnight, but it needs to get started and it kind of needs to get going fast,” Guzzo said.

The commissioner also talked about eliminating tax breaks for large corporations to even the playing field for businesses, and he said tax on cigarettes and tobacco would increase under the governor's proposal.

The state legislature will now work with the governor's proposal to create a budget bill.