Letter: Dayton's bad budget - it's in the detailsLast week, Gov. Mark Dayton released his plan to address the state’s $6.2 billion budget deficit. The plan raises $3.35 billion in new taxes, includes a 22.3 percent increase in General Fund spending, and adds two of the highest income tax rates in the nation.
By: Dist. 22 Sen. Doug Magnus, R-Slayton, Worthington Daily Globe
Last week, Gov. Mark Dayton released his plan to address the state’s $6.2 billion budget deficit. The plan raises $3.35 billion in new taxes, includes a 22.3 percent increase in General Fund spending, and adds two of the highest income tax rates in the nation.
Here are a few details of the governor’s plan:
- The largest tax increase ever proposed in state history.
- Closing corporate and other “tax loopholes.”
- Health care surcharges including the “Granny Tax,” a Medical Assistance surcharge for nursing homes.
- Proposes spending $37 billion — a 22 percent increase in FY 2012-13.
- Claims to cut $1 billion in spending, but the actual net reduction is only $485 million.
- Cuts health care coverage for 7,200 low-income Minnesotans on MinnesotaCare.
- Cuts 2 percent of funding to nursing homes and 4.5 percent to homes for those with disabilities
Gov. Dayton’s budget hits rural Minnesota especially hard with significant cuts to nursing homes and group homes. Minnesota’s border regions will also suffer from a loss of economic development due the competitive tax rates of neighboring states.
Green Acres fix headed to full Senate Vote: The Senate Tax Committee approved a plan that fixes the problematic Green Acres program, sending it to the full Senate. Senate File 222 calls for modifications to the Minnesota Rural Preserve program. Under the proposal, the eight-year irrevocable covenant and the conservation plan will no longer be required to qualify as rural preserve. The three-year tax payback for landowners who leave the program remains.
Rural preserve is the category for land that is attached to agricultural land but is not in production. The Rural Preserve program has been a source of frustration, confusion and irregularity since its introduction in 2009. This bi-partisan solution recognizes that farmland is farmland-and there is no ‘non-productive’ land. This will make it simpler and easier for farmers and the agriculture community to remain protected from unnecessary property tax increases.
Local government sales tax relief: A group of lawmakers are proposing legislation that will give additional relief to Minnesota cities concerned about potential cuts to local government aid (LGA). The measure would allow them to keep more of their own money, rather than paying some in sales tax and hoping for its return in state aid. Currently, most sales to local units of government including cities, counties and townships in Minnesota are taxable. This bipartisan proposal would repeal the sales and use tax liability for cities, counties and townships.
Coming up: This week, Senate Committees will continue to hear budget recommendations from agency commissioners throughout the week. Later in the week, the Finance Committee will hear two bills that work to reform the state’s health care delivery system.