Minn. Dems: Budget Deal Must Have Cuts, Tax Hikes
ST. PAUL, Minn. (AP/WCCO) -- Minnesota House and Senate Democrats are laying down a few markers on the upcoming budget debate: Any 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 discussed Wednesday by the leaders of the Legislature's Democratic majorities gibe with promises made in last year's campaign.
"There's a couple things I think people need to accept," said Senate Majority Leader Tom Bakk. "We are not going to pass a budget that relies on continued borrowing. We are not going to pass a budget that has accounting gimmicks in it. We are going to have an honest conversation with Minnesotans about the challenges that we face."
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 deepen the fiscal problem.
At their joint news conference, 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."
Republican leaders say they'll oppose any tax hikes and most new spending.
"We think this is a time for prudence and a time for caution, and not a time to blow out the budget with excessive spending,"
said Sen. David Hann, the Senate Minority Leader.
But Democratic leaders bristled at Republicans who claimed the deficit could be easily erased simply by cutting the budget.
"A word of caution to Republicans that are lamenting their great work of the last two years: Cool your jets," Bakk said.
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