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Senate gives approval to $2.2 billion income tax hike

ST. PAUL -- Senators opted to raise nearly every Minnesotan's income tax as a way to help fill a massive budget state budget deficit.

The bill that passed 35-31 Friday night would increase the percentage paid in all three existing Minnesota income tax brackets and add a fourth tier for couples earning at least $250,000 a year and single Minnesotans making about half that. Income taxes would rise $2.2 billion.

Republicans were joined by a few Democrats, mostly those in conservative districts, in opposing the measure.

Gov. Tim Pawlenty said he will veto the measure if it reaches his desk.

"Now is the time to reduce government spending and prioritize programs, not increase taxes," Pawlenty wrote to Sen. Tom Bakk, chairman of the Senate Taxes Committee.

But Bakk, DFL-Cook, said that Pawlenty's no-new-tax stance "is failing Minnesota."

Bakk, a governor candidate, defended a provision that ends Pawlenty's Job Opportunity Building Zones program designed to cut taxes on new rural businesses.

"We just cannot continue under these budget circumstances what we have done in the past," Bakk said.

Other rural senators rattled off lists of businesses that have succeeded due to JOBZ, but they failed to restore any of the program's provisions.

The House today takes up its own tax bill, which raises $1.5 billion taxes in a variety of ways.

Public safety funded

Public safety and the courts should be funded better than the governor recommends but less than under the current budget, the House decided Friday.

Representatives voted 85-45, on party-line vote with Republicans opposed.

"We put together the best bill we possibly could under some extraordinary circumstances where we had to make these cuts," said Rep. Michael Paymar, DFL-St. Paul, chairman of the public safety finance committee.

Davis works for Forum Communications Co., which owns the Daily Globe.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.