Governor's budget? More taxes, more spending
Minnesotans can expect higher taxes and more government spending if the new Democrat majorities in the Legislature use Gov. Mark Dayton's budget recommendations as guideposts for the upcoming biennium.
The proposal the governor unfurled would increase General Fund spending by more than $2.5 billion. This includes $3.7 billion in new taxes, the largest tax increase ever proposed by a Minnesota governor. Things like haircuts, auto repairs, internet purchases and clothing items of $100 or more would be subject to taxes. Smokers would pay 94 cents more per pack.
These regressive taxes would hit citizens who cannot afford another hit to the wallet. We would all pay more, even with the governor's idea of reducing the state sales-tax rate to 5.5 percent. Most Minnesota workers already are dealing with the pain of less take-home pay after the federal government allowed payroll taxes to increase.
State revenue officials indicate new taxes would cost Minnesota's business owners more than $1.5 billion, causing some to either close their doors or move out of state. The new top tax rate would rise two full percentage points to 9.85 percent.
Some people are calling this plan "a budget for a better Wisconsin." In fact, Gov. Scott Walker admitted Dayton's plan would up the ante on enticing Minnesota companies to cross the border.
On the other hand, the governor proposes providing a property-tax rebate of up to - and I repeat, up to - $500 for all Minnesota homeowners. That means middle-class families would be paying more for daily purchases, while Minnesota's richest homeowners can get a government rebate.
Maybe the most perplexing thing in the governor's budget is he would not fully repay the money owed to Minnesota's schools until 2017. This should be a top priority. We should be paying off debt to our schools as soon as possible, not delaying it further.
While the governor can issue budget recommendations, it is up to the Legislature to draft the bills that comprise a budget. This process will pick up in earnest after we receive the February economic forecast for our state, providing us with an updated set of numbers. I will keep you posted as things transpire.
One quick note on an unrelated topic: I joined a crowd of thousands at the Capitol to show my support for the unborn and the pro-life legislation. It was heart-warming to see so many folks brave the bitter cold to support this cause.
Rep. Mark Anderson
Minnesota House Republican Caucus