Tribune Editorial: Dayton plan not for faint of heart
Say what you will about Minnesota Gov. Mark Dayton's tax and budget plans -- there is nothing timid about them.
There is something in the plan for everyone to love -- and hate.
It raises income taxes on the well-to-do, creating new income tax rate of 9.85 percent for married couples making more than $250,000 and individuals who make more than $150,000.
But it lowers the corporate income tax rate from 9.8 percent to 8.4 percent. And it includes a two-year freeze on state property taxes for businesses.
It provides a property tax refund of up to $500-per-household for the middle class on down -- but would raise cigarette taxes by nearly $1 a pack.
It drops the state sales tax from 6.875 percent to 5.5 percent, but broadens it to include most services, such as haircuts and auto repairs, and clothing items that cost more than $100.
The proposal raises about $2 billion, and Dayton would use about half of that to plug a big budget hole and the other half for education at all levels, job training, and property tax relief.
Dayton suggests $118 million in new public school funding, an average of $52 per student, and $125 million more for special education.
More money would be spent on early learning and all-day kindergarten, which would be optional for schools across the state.
Public schools would receive $15 billion under the Dayton plan, with the state's two higher education systems getting nearly $3 billion, $80 million more each.
Dayton wants to increase payments to cities and counties $120 million to help keep down property taxes.
Rep. Paul Marquart, DFL-Dilworth, who chairs the House education finance Committee, says the plan is solid.
"For too many years we've failed to make the necessary investments to help our economy and middle class grow," he said.
Locally, the new "fourth tier" income tax rate on the well-to-do would hit 131 Becker County taxpayers, according to information compiled by our St. Paul Bureau.
The average homeowner in Becker County would see their property taxes drop by 11.3 percent.
The average Becker County business property tax would drop by 2 percent.
Detroit Lakes school funding would increase by $148 per student.
M State Detroit Lakes students who receive State Grants Program funding - 476 students -- will each receive an average financial aid increase of $300.
The property tax rebate for each Detroit Lakes homeowner would be $500.
Although it will be reworked by the DFL-controlled Legislature, Democratic lawmakers were generally pleased with the proposal.
"This is the best state budget for education the state has seen in decades," said House Speaker Paul Thissen, DFL-Minneapolis.
Republicans are less than thrilled at the proposed surge in taxes and spending that they are powerless to stop.
But many Democrats feel middle class Minnesotans have not had a level playing field on taxes for years, and it's time to fix the system.
Dayton offers a bold blueprint to do just that, and it's likely to be followed by the Legislature.
Voters will decide next year whether the DFL has over-played its hand.