Mondale-Carlson panel: $3.6 billion in cuts, $1.4 billion in revenue

Posted at 2:21 PM on July 7, 2011 by Catharine Richert (13 Comments)
Filed under: Budget

A six-person panel assembled by two former Minnesota statesmen has proposed a mix of spending cuts and tax increases to close the state's budget gap.

The group, which includes John Gunyou, who worked for former Republican Gov. Arne Carlson, and Jay Kiedrowski, who worked for former DFL Gov. Rudy Perpich, believes that $3.4 billion in spending cuts from current budget projections is in order.

The group also recommends $1.4 billion in new revenue to close the state's budget gap, including $250 million in increased human services surcharges, a tobacco tax increase of $1.29 per pack for $330 million, and a temporary 4 percent increase in income taxes for the coming biennium.

Sales taxes should be broadened and lowered in the long term, according to the plan.

The panel was convened July 5 by former Vice President Walter Mondale, former Sen. Dave Durenberger and Carlson.

In a press release, Dayton said that the committee's recommendations mirror his own budget proposals, save for one important detail.

"I respectfully differ with the Committee on their recommendation of a 4% temporary income tax surcharge on all Minnesota taxpayers," Dayton said. "My goal has consistently been to protect most Minnesotans from either an income tax increase or a property tax increase, by raising state income taxes on only the wealthiest 2% of Minnesotans."

Here's what House Speaker Kurt Zellers had to say about the plan:

"The 3rd Way Budget Commission recommendation raises income taxes on every Minnesotan. It also taxes Joe Six Pack's six pack and makes those who smoke pay more. Like Governor Dayton's offer yesterday, this again shows that it's no longer about wanting a tax increase on the rich, it's about raising whatever taxes he can in order to spend more. Families across Minnesota are already struggling to make ends meet. This is not a solution. It is a retread of failed tax and spend policies. Republicans will not raise taxes to pay for unsustainable government growth."

Comments (13)

Great! Replace the temporary income tax surcharge with a tax for the wealthy (a permanent tax on the wealthy) and maybe we can get somewhere. Thank you to the joint conveners who put aside politics and engaged their critical thinking to get the job done!

Posted by SC | July 7, 2011 3:06 PM

What's the point of this? A bunch of former employees.. No one is listening.

Posted by JN | July 7, 2011 3:15 PM

This is a sensible and balanced solution!

Our Legislators and Governor should listen to these senior Statesmen.

Posted by Jeri Reinhadt | July 7, 2011 3:35 PM

What is a Human Services Surcharge?

Posted by Kristin | July 7, 2011 3:44 PM

It's about time. The millions the Republicans and Dayton are losing each day are increasing the deficit and now Minnesota's credit rating has taken a hit.

How about a law that says it is illegal to shutdown and the lawmakers will be fined--big bucks

Posted by Janet Marxen | July 7, 2011 3:50 PM

With all due respect, when did Rep. Zellers start caring about, or even noticing Joe Sixpack.
Somebody should explain to the Rep how negotiations work. The Governor vetoed the budget that came from the House. But when Dayton comes with new ideas, he dismisses them as "same old Dem tax and spend", and then offers up the same old, long ago vetoed proposal. His lack of effort and work ethic should be reflected by a pay cut. Infact he should be paying us back.

Posted by Dione | July 7, 2011 9:00 PM

THANKS --AND-- "TAX THE SUPER RICH" I agree with a comment below that thanks are due. I also agree to the idea that we swap the proposed temporary across-the-board 4% tax increase proposed by the panel, with a temporary increase on the super rich. The unemployed or underemployed are subsidizing the rich in this state. DO SOME OF WHAT'S LEFT FROM ALL THREE PLANS AND GET IT DONE! as stated in the previous comment . Sure, reduce costs

DO NO MORE HARM TO OUR VULNERABLE--the disabled, mentally challenged, poor children and elderly. REQUIRE A PANEL TO PROPOSE OPTIONS for a referendum in February 2012 to avoid future deficits, shutdowns, and budget delays.

Posted by Abby | July 7, 2011 10:16 PM

Interesting solution... Ban smoking and tax smokers. It doesn't seem sustainable. Where will that tax income come from when you run out of smokers?

Posted by Rhet | July 8, 2011 12:32 AM

The critical point I see here is statesmen working together to find solutions. Our major problem is that the current Republican agenda is not to make things work, but to make the DFL look bad, with the hopes that they will get even more votes in the next election cycle. They don't appear to realize how badly they are hurting their own constituents.

Same tactics happening on the federal level.

We need a return to civility, and legislators who are committed to serving the citizens of MN, not their own special interests only.

As for ideas, I propose a tax on clothing. I rarely buy clothing, as I can't afford it. It could be set up in such a way that professionals and blue collar workers alike could get an allowance for clothes needed for work, but beyond that, everyone would pay taxes on clothing. I keep seeing these women on HGTV who need an entire closet for their shoes, not to mention their Prada purses. Give everyone allowance for two pairs of shoes a year, and the rest are taxed. Could bring in a lot of income, and it would not be unduly regressive, as the rich spend thousands on clothes. Those of us with limited resources patch our jeans, and make them into creative fashion statements. I get most of my clothes--the few that I buy--from Goodwill. They have some excellent quality clothing at bargain basement prices. A tax on clothing is something I could stomach, and the rich who spend lots on clothes, shoes, accessories, will not even notice the extra cost. IMHO.

Posted by Rachel Scott | July 8, 2011 3:13 AM

I say tax the wealthy. Things like second properties, boats over 20 feet long, clothes over $100 per item, vehicles over $30,000, and home over $500,000 should have a tax; also plastic water botlles. People's basic needs should come first in our priority list; then infrastructure improvements.
Let's not be greedy. We all have to share this world.

Posted by A Theye | July 8, 2011 8:52 AM

re: tax increase
The Governor's proposal will increase by 3% the income tax on the 7,700 highest taxable personal incomes in Minnesota. We are told this will raise $746,000,000 in revenue. Given this is annual revenue, then the math says the average taxable income of these 7,700 is about $3,230,000.

It sure seems to me that the real reason the one side of the legislative aisle is so against this proposal is because this very same group of 7,700 gives them a WHOLE lot of money in way of contributions to their campaigns, PACs and party (I imagine I should write parties, at least for now). Why else take such an uncaring, intractable position that is causing so much pain to so many?

Posted by Dan | July 8, 2011 10:44 AM

I work at non-profit in the human service field. We provide services for those with mental health disabiliites, homelessness, and mentally retarted people. Everyday my clients are being hurt by this shut down, but those with money just sit back and fight with each other, while those who really need the services are going hungry. They need to come to a budget deal now, and stop arguing. Raising human service surcharges is not really going to help anything as a lot of people that use human services do not have money anyways, I do not understand why they can't just tax the top 2% wealthy people. Also I agree that a tax on clothing would help. Many other states have sales tax on clothes and shoes and people still buy clothes in those states. I really think the Republicans need to stop trying to make the Democrats look bad and blame them. The more they try to place blame the more they are concentrating on this issue at hand and the worse they make themselves look. They need to just make a budget deal and agree that since they could not do their job they will take pay cuts. I think the longer they drag this out the more of a pay cut they should receive. That may be the only way they will get motivated. The shutdown is not affecting them badly, but it is the underprivaledged people of Minnesota.

Posted by Jamie | July 8, 2011 4:54 PM

This is a huge issue. I wish people would listen to us to make their decisions. Minnesotans are coming together and agreeing on things involving politics. That has to say something about how hard this is hurting the whole state. We all feel that this whole mess is completely ridiculous and we have all come up with good ideas to fix it. Why don't the people that we elected to take care of us listen to the people and do their darn jobs? Government is such a waste of time. This proves it! All we have is a bunch of older people sitting around thinking inside of this tiny box because they are too afraid or stuck in the past to get out of it. There are so many ways to take care of this deficit... they are just to stubborn to hear it! I bet the republicans don't want the tax increase on the rich because it will take away their precious money. So instead they are taking it away from the very poor people (such as me) causing us to losing daycare assistance and having to choose between work or food money. Just sit down and talk like the adults you are supposed to be and come up with a compromise! How hard is that! Enough of the childlike backstabbing and name calling! Run our state!

Posted by Dena | July 9, 2011 3:07 AM

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