Lawmakers are expected to vote today on a DFL plan to solve the state’s more than $3 billion budget deficit with $2.5 billion in spending cuts and roughly $430 million in new tax revenues.
House Speaker Margaret Anderson Kelliher (DFL-Mpls) said the proposal represents a fair compromise between the priorities of the DFL-controlled Legislature and those of Republican Gov. Tim Pawlenty.
“Today we’re going to vote on a budget that more than meets the governor, but does not compromise our most important priorities,” Kelliher said.
The plan would ratify most of Pawlenty’s 2009 unallotments, which were thrown out last week by a Minnesota Supreme Court ruling. The proposal includes delaying $1.8 billion in K-12 school aid payments and cutting $294 million in county and city aids and credits. A handful of programs cut by the governor ─ mostly in the area of human services ─ would be spared.
Additionally, the legislation would create a fourth income tax tier that would affect the state’s wealthiest residents. Minnesotans whose taxable income is greater than $200,000 for joint filers and $113,100 for single filers would see their income tax rate go up from 7.85 percent to 9.15 percent.
The new tax rates would be retroactive from Jan. 1, 2010; however, the rates would drop back down to 7.85 percent in 2013 if the state’s budget shows a projected $500 million surplus. The plan would net Minnesota an additional $433 million in the current biennium.
House and Senate Republicans said tax increases are unacceptable as a budget solution, and warned that Pawlenty will veto the legislation.
“It’s a compromise that’s dead on its face,” said House Minority Leader Kurt Zellers (R-Maple Grove), who urged DFLers to fully ratify and make permanent the governor’s unallotments.
That may be unlikely, however. House Majority Leader Tony Sertich (DFL-Chisholm) noted that House DFLers and Republicans voted overwhelmingly against ratifying the governor’s unallotments last week.
“We have to find a solution that works for everyone,” Sertich said.
- Nick Busse
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