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Editorial: Loving and hating the state spending plan

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And here we go. The Minnesota Legislature's top priority this session -- setting a two-year budget that, hopefully, also puts the state on more-solid, longer-term financial footing -- kicked off Tuesday with the release of Gov. Mark Dayton's proposed spending plan. The state's top leader pitched new and increased taxes and more spending for education, transportation and other needs and wants.

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There's plenty to love and hate as lawmakers embark on a nearly four-month tweaking/embracing/rewriting process. They have until May 20 to set the budget. Typically, and disappointingly, in these, the opening days of the process, the loving and hating already is falling along party lines.

Who's loving it

• Clothes shoppers at everyday places like Target and JCP, where most items are less than $100. Lower-priced clothes are to remain free of a sales tax.

• People who hate paying taxes on things they buy. The sales tax rate is proposed to be reduced from 6.875 percent to 5.5 percent.

• Property owners, who stand to receive tax credits or rebates of up to $500.

•Minnesota corporations. The governor proposes cutting the corporate income tax rate from 9.8 percent to 8.4 percent while freezing for two years businesses' property taxes.

• Cities and counties, which stand to receive $120 million more in aid to help keep down property taxes.

• Advocates for economic development and new jobs. An estimated $86.5 million is earmarked for business loans, tax breaks, incentives and other economic development tools that can result in new employment opportunities.

• Education. Minnesota's public schools stand to receive $118 million more, or $52 more per student. Early-education would get $44 million more while efforts to expand all-day kindergarten would be buoyed by an additional $40 million.

• Higher education. A $240 million boost promises to benefit college students from low- and moderate-income families who qualify for a state-run grant program; the University of Minnesota, which could expand research and freeze tuition with an $80 million state funding increase; and the Minnesota State College and Universities, or MnSCU sytem, which is still recovering from a 14 percent funding cut in the last budget.

• The Twin Cities' three largest local chambers of commerce, which have been advocating for transportation improvements. A new 25-cent sales tax in the seven-county metro area would benefit transit projects.

• Unions, including the Minnesota Association of Professional Employees. "Gov. Dayton's budget will end the era of Minnesota's chronic budget deficits," MAPE Executive Director Jim Monroe gushed in a statement. "For far too long, Minnesota's budget was balanced on the backs of the middle class. It's time to close corporate tax loopholes and have the wealthiest 2 percent pay their fair share."

• Unions, including the teachers' union, Education Minnesota. "This is the first time in many years that the Legislature has started with an investment mentality toward public education," Education Minnesota President Tom Dooher said in his own statement.

• Smoking-cessation advocates, who praised Dayton's proposed 94 cents-per-pack tax increase on cigarettes.

Who's hating it

• Anyone getting a haircut or tattoo; anyone consulting a financial planner, wedding planner or lawyer; and even anyone taking golf lessons. The governor proposes first-ever taxes on such services.

• Consumers of high-end clothing. The governor proposes taxing clothes that cost $100 or more.

• Anyone who makes more than $150,000 a year or more than $250,000 a year with their spouse. Their income tax rate could increase from 7.85 percent to 9.85 percent.

• Smokers. The state's cigarette tax would jump 94 cents per pack to raise a projected $370 million.

• State agencies. They'll be asked to start absorbing inflation costs, saving the state $890 million.

• According to Dayton, people who love to complain about politicians "kicking the can down the road." His plan, he said, "ends the fiscal games, accounting gimmicks, payment delays and other financial manipulations of the last 10 years."

• The no-new-taxes crowd. "Everybody is going to get hit with these taxes," Senate Minority Leader David Hann, R-Eden Prairie predicted.

• Fans of smaller, spend-less government. "Gov. Dayton's irresponsible budget fails to put Minnesota back on the right track by dramatically increasing spending while raiding the hard-earned dollars of middle-class families," John Cooney, the Minnesota state director of Americans for Prosperity, wrote last week.

• Schoolyard bullies. The governor hopes to pour $1 million in programs to prevent bullying in schools.

• Snowbirds. According to the Taxpayers League of Minnesota, Gov. Dayton's budget would raise $30 million by repackaging tax increases on people who split their residency between Minnesota and other states.

• Small-business owners. They'll get caught by the tax increase on the top 2 percent of wage earners, according to the Taxpayers League of Minnesota.

• The Taxpayers League of Minnesota, which called Gov. Dayton a "taxaholic" with "true socialistic tendencies" in the wake of the release of his budget proposal. The budget, the league said, "would increase taxes on everyone in Minnesota."

• Shoppers in the Twin Cities. A new 25-cent sales tax in the seven-county metro area is being proposed to pay for transit projects.

-Duluth News Tribune

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