by T.W. Budig
ECM Capitol reporter
House Democrats propose to pay back the school shift, fully fund all-day kindergarten and tax the wealthy in order to help pay for it.
“We don’t take this approach lightly,” House Speaker Paul Thissen, DFL-Minnesota, said of creating an “absolutely temporary” fifth-tier income tax bracket.
The bracket comes atop the proposed fourth-tier income-tax increase proposed by Democratic Gov. Mark Dayton.
In combination, the tax increases, which Democrats justify by arguing the wealthy are not paying their fair share of taxes, would bring in more than $2 billion.
House Democrats call their fivth-tier proposal a “surcharge” and say it would blink off once the school funding shift is paid back, perhaps within two years.
The surcharge would apply only to those making more than $500,000 per year, House Democrats say.
Additional tax increases, such as a cigarette tax increase and the closing of perceived corporate tax loopholes, could come out of the House Tax Committee, Thissen indicated.
Beyond paying back the remaining $854 million school shift — a task Dayton in his proposed budget leaves to the future — House Democrats would erase the lingering $627 million state budget deficit and propose about $1 billion in new spending.
They depict their budget as “honoring promises made.”
House Ways and Means Committee Chairman Lyndon Carlson, DFL-Crystal, said the proposed $37.8 billion two-year budget would get the state off the budgeting “roller coaster” and offer stability.
Democrats say their budget focuses on education, particularly for the youngest students.
“Finally, for the first time in the history of the state, we’ll fund all-day, everyday kindergarten,” said House Education Finance Committee Chairman Paul Marquart, DFL-Dilworth.
Marquart spoke of all-day kindergarten and other education investments as keeping with the House Democratic goal of strengthening the workforce.
“And we know what works,” he said.
Education Minnesota, the teachers’ union, applauded House Democrats.
“Minnesotans have been talking to educators for years about the need for smaller class sizes and free, all-day, every day, kindergarten,” Education Minnesota President Tom Dooher said in a statement.
“The budget priorities released today show that the leaders in the House have heard the same thing,” he said.
All told, House Democrats propose spending an additional $700 million on eduction and slate $250 million towards property tax relief, in part targeting local government aid.
They propose about $150 million in reductions to the health and human services budget.
In contrasting the House Democratic budget proposal to the governor’s, Thissen pointed to the school shift repayment as a main difference.
In most funding areas, Dayton’s budget and the House Democrats’ budget is close, he noted.
House Republicans warned not to look at the House Democrats’ proposed budget for final numbers.
Former House Ways and Means Chairwoman Mary Liz Holberg, R-Lakeville, said other tax and fee increases could be thrown into the mix.
“All these things have a cumulative effect,” Holberg said.
She pointed to a proposed increase in the minimum wage as another burden affecting business.
House Minority Leader Kurt Daudt, R-Crown, spoke disapprovingly of the state becoming an outrider in taxation.
That the income tax surcharge would be temporary defies experience, Daudt argued.
Nothing is more permanent, he quipped, than a “temporary” surcharge.
But Daudt offered only a minor budget reduction when asked how House Republicans proposed to cover $1.4 billion in budget deficit and school shift.
House Republicans, while critical of a perceived lack Democratic education reform, indicated support for paying back the school shift.
Although a political issue, several school association or district officials recently indicated they were not concerned how quickly the school shift was paid back.
Senate Democrats are expected to release their budget targets on Wednesday (March 20).
Tim Budig can be reached at [email protected]