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Dayton budget plan

Minnesota Gov. Mark Dayton shuffles paperwork on Tuesday, Jan. 22, 2013, while awaiting his turn to answer questions about a budget plan he just announced. Forum News Service photo by Don Davis


Changes Minnesota Gov. Mark Dayton proposes in taxes include:

• Sales tax rate reduction from 6.875 percent to 5.5 percent, but tax more items, including most services, such as haircuts and auto repairs, and clothing items that cost more than $100

• A new income tax rate of 9.85 percent for married couples making more than $250,000, individuals who make more than $150,000

• A drop in the corporate income tax rate from 9.8 percent to 8.4 percent

• A property tax credit of up to $500 for homeowners

• A 94-cent per-pack increase in the cigarette tax

• A two-year freeze on state property taxes for businesses


New spending the governor proposes include:

• $120 million aid for cities and counties

• $86.5 for economic development programs designed to create jobs

• $118 million in school funding, $52 per student

• $125 million for special education programs and $40 million for all-day kindergarten

• $80 million for the state grant program, providing funds for low- and moderate-income college students

• $80 million each to the University of Minnesota and Minnesota State Colleges and Universities

• $10 million more for teacher evaluations and other education programs

• $9 million for English language learning


The governor says his budget will save:

• $1 billion in better managing health care

• By eliminating a "loophole" afforded some corporations

• $890 million by requiring state agencies to absorb inflation costs

Source: Governor's office