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Associated Press, Published March 20 2013

Dayton hits road to sell income tax hike, education plans

ST. PAUL — As Gov. Mark Dayton hit the road Wednesday to sell his budget proposal, Senate Democrats offered the framework of a plan that would spend more than the governor recommended for all-day kindergarten programs and would substitute state money for some locally approved education levies.

The two priorities are reflected in spending targets rolled out by majority Democrats and are the first step in the Senate's process of fashioning a budget they will vote on in April. Key details are unknown, including precisely how they will generate the roughly $2 billion in new taxes to pay for the additional spending and property tax credits while simultaneously addressing a projected $627 million budget shortfall.

Senate Majority Leader Tom Bakk, DFL-Cook, said an income tax hike on the highest earners and an extra tax on cigarettes are likely, mirroring Dayton's call for added revenue.

The Senate's blueprint for a two-year, $38 billion budget was the last of three plans to be unveiled. On Tuesday, the Democratic-led House issued its outline, which was most notable for a proposed temporary income tax surcharge on the top 1 percent of earners to pay off IOUs to schools.

Dayton has produced — and already revised — a program-by-program budget. He was visiting Duluth on Wednesday night in the first stop in a planned tour to get public input on his latest budget proposal.

Democratic senators highlighted their pitch for an additional 3 percent for early education through high school above what the state was due to spend the next two years. That includes $150 million to buy down local property tax levies that some districts use to supplement their state aid.

"In most school districts, property taxes will either go down or remain the same," Bakk said.

Senate Minority Leader David Hann, R-Eden Prairie, was cool to what he regarded as a spending shuffle that only makes schools more dependent on the state.

"It's not reform in my mind just to have the state pay for it," Hann said. "You have to look at what does the spending accomplish, not how much do you do."

Separately, the Democratic plan calls for a significant boost in local government aid programs and property tax credits, beyond what Dayton put on the table.

Under the Senate proposal, most areas of the budget would be in line for more money. A notable exception is in the health and human services area, where senators say they'll strive for $150 million in savings. Finance Committee Chairman Richard Cohen, DFL-St. Paul, said streamlining or other changes in how programs are financed make it possible to scale back "without hurting folks."

But advocates of programs for vulnerable populations are nervous even as they lack any concrete information about where the cuts will hit.

Bruce Nelson, chief executive of the disability advocacy group ARRM, said after years of cutbacks he has grave concerns.

"I don't know where they can get that much money," Nelson said.


Copyright 2013 The Associated Press.