Minnesota Democratic senators knew in February they would suggest raising taxes to fund their top priorities, but first talked about it publicly last week and on Saturday passed a nearly $1 billion income tax increase.
The tax increase was kept under wraps to direct attention toward education needs, the Senate's education finance chairman said.
"There is a hesitancy on keeping the center of focus on taxes rather than investment," Sen. LeRoy Stumpf, DFL-Plummer, said Saturday after senators approved his bill adding $444 million to education funding while raising income taxes on the richest Minnesotans.
Senators approved the bill 35-29, with seven Democrats - mostly from Twin Cities suburbs - joining Republicans in opposing it. Gov. Tim Pawlenty says he will veto any tax increase.
The House appears likely to approve a smaller income tax increase, with proceeds being used to reduce property taxes.
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Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, admitted the income tax increase won't survive in its current form once negotiations begin with the House and Pawlenty.
However, the leader said, the "Senate is committed to not going home without fixing property tax and investing in education." That means more taxes are needed, he added.
Republicans said the added money is not needed and they complained that the tax measure was written behind closed doors with no public input. The plan was first heard by a committee about 24 hours before the full Senate debated it.
For weeks, Senate leaders have refused to talk about a tax increase, even though Stumpf now says they knew one would be coming. Stumpf said avoiding talking about taxes was intentional.
However, there was plenty of tax talk Saturday, mostly from Republicans.
"This is the mother of all pigs," Sen. Ray Vandeveer, R-Forest Lake, said.
Most of the new taxes would be split between education spending and lowering homeowner property taxes.
"We can't just come out and say we want something for nothing," Sen. Sandy Pappas, DFL-St. Paul, said. "We need to pay for it."
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The bill would increase public college and university spending $93 million in the next two years. That is enough to keep Minnesota State Colleges and Universities tuition increases at 3 percent the next two years. University of Minnesota tuition increases would be limited to 5 percent a year.
Public school K-12 education would get a $298 million boost for the biennium, an average increase of $100 per student a year, above a $498 million increase senators already approved.
Another $54 million would be spent on providing funds for parents to place children in pre-kindergarten programs.
Senate Tax Chairman Tom Bakk, DFL-Cook, echoed other Democrats' comments about the need to raise taxes: "We simply have to invest in our young people because that is what will make our nation prosper in the future."
Warning "tomorrow is too late," Sen. Steve Murphy, DFL-Red Wing, said education needs money now.
When he campaigned last year, Murphy said, voters told him they would be willing to raise taxes to help fund education improvements.
"Quit trying to protect the upper-crusters," he told Republicans.
Voters did not send senators to St. Paul to raise taxes, Sen. Bill Ingebrigtsen, R-Alexandria, countered.
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"I'm going to tell them exactly who raised their taxes to be No. 1 in the United States," he added, talking about Democrats.
The wealthy who would be most affected by the tax increase created many of Minnesota's jobs, Ingebrigtsen said.
Democratic researchers estimate that about 93,000 taxpayers would pay the higher taxes.
The new tax would be placed on couples earning more than $250,000 a year and single filers with incomes of at least $141,250. Taxpayers who fit into the new category would pay 9.7 percent of their income to Minnesota, up from today's top rate of 7.85 percent.
