The Free Press, Mankato, MN

State, national news

May 12, 2013

Dayton, Minn. DFL leaders reach budget deal

ST. PAUL, Minn. (AP) — Gov. Mark Dayton and the Legislature's top Democrats announced an agreement Sunday to raise taxes on Minnesota's wealthier residents and cigarette sales and to spend the extra money on public schools and colleges, as well as on other areas.

Dayton and DFL leaders held a rare Sunday news conference to release initial details of their deal on the state's two-year budget, though they left a number of details still to be worked out.

House Speaker Paul Thissen said alcohol and gas tax increases are still possible, too, and that a controversial plan to increase pay for legislators is also still in play. Definitely off the table is a Senate DFL proposal to raise the state sales tax on clothing, although it's still possible that some sales taxes paid by businesses could go up.

The legislative leaders said those decisions would be made in House-Senate conference committees in the eight remaining days before the May 20 deadline to end the regular session.

"I think it's important to know that we're going to be investing in priorities that Minnesotans clearly share," said House Speaker Paul Thissen, DFL-Minneapolis. He called spending increases of $475 million for public schools and $250 million for state colleges and universities "historic," singling out money to fund all-day kindergarten in school districts statewide. The deal also calls for repayment over the next two years of back debts owed to schools in delayed aid payments.

To fund those things, along with $89 million in spending increases for job creation and economic development programs, Democrats raise at least $2 billion in new taxes. They would raise income taxes on the wealthiest 2 percent of taxpayers, creating a fourth tax rate of 9.85 percent on income above $150,000 for single filers and $250,000 for couples. The current top state income tax rate is 7.85 percent.

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