Posted at 6:34 AM on February 28, 2011
by Tom Scheck
Filed under: Daily Digest
The final fiscal signpost for the 2011 legislative session will be announced today when state finance officials release the budget forecast. The key question is what will the GOP blueprint for the budget problem look like? Gov. Dayton is proposing a income tax hike on top earners to balance the budget. Neither side is budging from their respective talking points right now.
House and Senate GOP hold an avail in the early afternoon to discuss the forecast. Gov. Dayton meets with President Obama at the White House today. He'll hold an avail in the late afternoon when he gets back to Minnesota.
One thing for the GOP to be cautious about: State spending cuts slow economic growth across the U.S.
President Obama has few options to aid cash strapped states.
MNGOP Chair Tony Sutton sent a letter to GOP lawmakers saying a revenue increase violates their principles.
Republicans say they've made their final offer on alternative teacher licensure.
The PoliGraph says House Speaker Kurt Zellers exaggerated the tax increase impact on small businesses.
Dayton is wrapping up his trip to Washington D.C. today. He met with President Obama on Friday.
He talked Medicaid and flood control at the National Governors Association.
A panel awards the Metrodome roof repair contract.
Minneapolis has everything the Vikings want for a new stadium except for the bags of taxpayer money to pay for it.
Fishing rule changes take effect tomorrow.
Conflict of interest questions arise on the Legacy Council funding.
Minnesota got a $1 million grant for the health insurance exchange.
Protesters defy an order to leave the Wisconsin State Capitol.
Wisconsin Gov. Scott Walker says the protests haven't swayed him.
Protesters across the country rallied in favor of unions.
Secretary of State Hillary Clinton says the U.S. is ready to aid the opposition in Libya.
Senate Democrats say a stopgap measure put forward by the House GOP is acceptable. The measure, if passed, will avoid a government shutdown.
The Tea Party sends a message to Republicans in Congress.
DFL Sen. Amy Klobuchar campaigned in southern Minnesota.
Klobuchar also introduced a bill to reduce homelessness for the nation's veterans.
DFL Sen. Al Franken wants legislation that invests in STEM education.
DFL Rep. Tim Walz met with constituents in Rochester.
DFL Rep. Betty McCollum wrote an op-ed defending public broadcasting. Full disclosure: MPR receives CPB money.
There are two stories on GOP Rep. Chip Cravaack's first two months in Congress. MPR says he's voting for spending cuts and pro-union votes. The Star Tribune says his voting record is all over the map.
2012 Race for President
Tim Pawlenty is in Washington D.C. today for a fundraiser and to meet with Congressional Republicans.
Pawlenty lost a Tea Party straw poll to Herman Cain.
Tim Pawlenty said "The government is too damn big" during a speech to Tea Party activists in Arizona. Listen to his speech here.
AP writes that Pawlenty's speech is an attempt to win support of a group that isn't in his corner.
He also said Republicans should consider a government shutdown if the budget cuts aren't enough.
Newt Gingrich will form an exploratory committee within the next ten days.
GOP Rep. Michele Bachmann says the Tea Party is keeping them honest.
Bachmann was in Mexico and Colombia for a congressional delegation trip. She's a member of the House Intelligence Committee.
The FEC warns Bachmann on her campaign finance report.
Politico says President Obama is looking less beatable to the GOP.
Minnesota's projected state budget deficit has narrowed from $6.2 billion to $5.028 billion, according to two people who've seen new budget documents.
State officials are set to release a new economic forecast later today. The new number will guide budget discussions for the remainder of the 2011 legislative session. But despite the improvement, there's still a wide divide between DFL Governor Mark Dayton and Republican legislative leaders over how best to erase the remaining red ink. Dayton has proposed a significant increase in revenue, including an income tax increase on upper earners. Republicans oppose any tax increases and want government to live within its existing revenue.
Update: It's official.
Here's the full budget forecast:
Gov. Mark Dayton and Republican legislative leaders have reached agreement on an alternative teacher licensure bill.
Dayton sent a letter today to the chairs of the House and Senate Education Committees about the measure, which has already been passed by both chambers. The DFL governor said he plans to sign the new compromise.
"While Commissioner Cassellius and I do not agree with every provision in the legislation, after much give and take on both sides, we accept those differences in order to accomplish our shared objective: to pass reforms that will close the achievement gap and raise the educational standard for all Minnesota school children," Dayton wrote.
Dayton said the compromise creates a true alternative pathway program to address projected teacher shortages, assures well-prepared teaching candidates with content expertise and increases teacher diversity.
Gov. Dayton announced today that he will eliminate his 3 percent proposed income tax surcharge on Minnesotans earning more than $500,000 a year. Dayton also said he intends to reduce the level of his proposed cuts to Health and Human Services programs like nursing homes, MinnesotaCare and community action grants. Dayton also said he'll restore cuts to transit programs.
He made the announcement after state finance officials announced that the state's budget picture improved by more than $1 billion. The forecast shows the budget deficit is projected to be $5.03 billion in the next two year budget.
Dayton is still proposing to increase the state's income tax rate on Minnesota's top earners to 10.95 percent. He said his decision to eliminate the surcharge means Minnesota would not have the highest income tax rate in the country if his plan is enacted.
Republicans have said they don't support any tax hikes and will balance the budget through spending cuts alone. Here's the release from Dayton's team:
Following a forecast showing a nearly $1.2 billion improvement in Minnesota's budget deficit, Governor Mark Dayton today moved quickly to revise his proposed budget to promote economic growth and maintain his commitment to a fair, responsible and balanced budget.
Dayton's revised budget will eliminate his proposed surcharge, thus fulfilling his promise to keep Minnesota's top tax rate below the nation's highest, while improving progressivity. In addition, Dayton's revised budget, to be presented formally in the coming weeks, will: significantly reduce approximately $200 million in proposed cuts to the Department of Human Services for seniors' long -term care including nursing homes and home health care, Minnesota Care, and community action grants; restore the funding for metro and rural transit to eliminate any state-imposed need for fare increases; restore cuts to fire safety training; increase the research and development credit to promote Minnesota job growth; and provide $5 million to the Department of Employment and Economic Development (DEED) for the Minnesota Investment Fund (MIF) and the DEED Redevelopment Fund.
A new state forecast shows Minnesota's deficit for the next two years not stands at $5 billion dollars. That's more than a billion dollars smaller than the previous projection.
The forecast released by state budget officials today dropped the projected budget deficit from 6.2 billion dollars to 5 billion. House Speaker Kurt Zellers raising taxes as Governor Mark Dayton has proposed will only reverse the improvement.
"Whether its environmental, whether its tax, whether its business regulation, the one thing we have heard from our employers in Minnesota, and actually we've heard this around the country, is quit messing around with stuff," Zellers said. "That uncertainty is what leads them to then look for someplace else."
Zellers and GOP Senate Majority Leader Amy Koch also reemphasized that they won't support tax increases to balance the state's budget. They said Republicans still believe the best way to balance the budget is to cut spending.
"Our priorities remain the same," Koch said. "The priorities we set out were private sector job growth, it was reining in government spending, living within our means, and the third piece was government reform. And so these numbers, while improved certainly, you know that message is what we have to continue to talk about going forward."
Koch says they will release their proposed budget targets by March 10th.
The state economist threw some cold water on the GOP budget approach. Tom Stinson said a cuts alone solution would do slightly more to harm to the economy than a mix of spending cuts and tax increases, which is proposed by Dayton. House Speaker Kurt Zellers of Maple Grove sidestepped questions about Stinson's analysis. Zellers said he thinks the forecast had a clear message about taxes.
DFL governor Mark Dayton responded to the new forecast by pulling back on a temporary income tax surcharge he had proposed as part of his budget fix.
DFL House Minority Leader Paul Thissen, of Minneapolis, says the latest budget forecast means Republicans now have to move forward with their plans to balance the state's budget.
Thissen noted that more revenue from capital gains taxes was a key element of the improved forecast. He says that's a result of President Obama's agreement with House Republicans to extend Bush-era tax cuts.
"I think we should thank President Obama for brokering the deal to make sure that some of that work got done," Thissen said. "More importantly, we still have a $5 billion budget deficit. So we haven't solved the problem. What's going to me most important to me right now is to see the Republican proposal for balancing this $5 billion budget deficit."
DFL Senate Minority Leader Tom Bakk told reporters that he was pleased that the state's budget picture improved. But he said the state's structural budget problems are continuing.
"I'd like to say what a difference a year makes," Bakk said. "But we were in same spot a year ago."
While DFLers are arguing for the House and Senate GOP to put up a budget plan, Bakk and Thissen say it's unlikely their respective caucuses will put a comprehensive plan forward.
Governor Mark Dayton responded to the improved forecast by eliminating an income tax surcharge for the state's wealthiest residents from his budget plan. But Dayton still wants to raise income taxes for the state's highest earners. Republicans say the capital gains revenue is proof that giving a boost to business is the best way out of the budget deficit.
The Minnesota House voted to send Gov. Dayton a bill that would streamline the permitting process for businesses across Minnesota. The House voted to speed up environmental reviews and permits for businesses 87-44.
Supporters of the bill say it would improve the state's business climate and would require the MPCA and DNR to rule on permit applications within 150 days.
Democrats argued that it allow businesses to commissioner their own draft environmental reviews. They also complained that the House was acting on the bill one day before a comprehensive look at the state's permitting process is released. The Legislative Auditor is scheduled to release his permitting report tomorrow morning.
Gov. Dayton says he'll probably take the full three days before he decides to sign or veto the bill. He said he wants to read the Legisaltive Auditor's report. He also said he intends to meet with some environmental groups that have raised concerns over the bill.
Dayton has signed an executive order in January that would streamline state permitting.
Governor Mark Dayton has rolled back a proposed income tax increase after state finance officials announced a slightly smaller budget deficit for the next biennium. He's also pledging to spend $200 million on programs he proposed to cut.
The latest economic forecast released today shows the projected deficit shrunk from $6.2 billion to $5 billion, due to an increase in state revenues. Dayton is still proposing an income tax increase on top earners, but he eliminated an additional 3 percent surtax on people earning more than
$500,000 a year.
"That was always intended to be temporary," Dayton said. "I'm delighted that this revenue picture permits it to be extremely temporary, and would reduce then the top rate that I'm proposing to the 10.95 percent in the so called fourth tier. And it reinstates the pledge I made that Minnesota's top rate as I proposed it would not be the highest in the nation."
Dayton is reducing several spending cuts in his budget for programs like nursing homes, fire safety and transit funds. His budget now has about $765 million in permanent cuts. He is proposing to raise $3.2 billion in tax hikes, surcharges and fees.
Here are Dayton's proposed budget revisions: