Dayton calls for tax increase in speech

Gov. Mark Dayton repeated his tax-the-rich pledge during his first State of the State.

Michael Zittlow

Gov. Mark Dayton said heâÄôs determined to turn Minnesota around, and his plan to tackle the stateâÄôs budget gap would include tax hikes for the wealthy âÄî a move that drew sharp criticism from the LegislatureâÄôs Republican majority.

In his State of the State address Wednesday, Dayton focused on improvements to education, transportation, public health and government agencies to restore Minnesota from financial decay.

Dayton painted the stateâÄôs situation as grim.

“We were left with a horrendous fiscal mess, a decade of economic decline and state agencies poorly managed,” he said. “We will, however, turn it around.”

Improving education will be his primary goal, he said.

In his address, Dayton previewed his budget, due out Tuesday, and asked legislators to increase funding for K-12 education. He did not hint at a similar financial push for higher education but acknowledged rising tuition in MinnesotaâÄôs public colleges and universities.

“Any college graduate saddled with many thousands of dollars in students loans and unable to find a job, wants a better Minnesota,” he said.

“[Dayton] knows that investing in higher education is crucial to the state, as well,” Dayton spokeswoman Katharine Tinucci said. “The realities of the budget are very challenging.”

The sharpest criticism from Republicans surrounded DaytonâÄôs stance on raising taxes on MinnesotaâÄôs highest earners. Dayton spoke directly to wealthy citizens, asking them to help the state out of its financial shortfall.

“I ask MinnesotaâÄôs business leaders and other most successful citizens to give us two years to turn this ship of state around,” Dayton said.

Although Dayton mentioned an amiable relationship with Republican leadership, Speaker of the House Kurt Zellers, R-Maple Grove, sharply contested DaytonâÄôs stance on a tax increase.

“He is making promises that he does not have the dollars to support,” Zellers said.

Zellers and Majority Leader Sen. Amy Koch, R-Buffalo, pointed to a bipartisan group of governors across the country who have cut taxes instead of increasing them. Koch said Dayton should expect no support from Republicans in the Legislature on a tax increase, and described DemocratsâÄô reaction to DaytonâÄôs statement as “tepid at best.”

Sen. Ellen Anderson, DFL-St. Paul, said KochâÄôs comment was “off-base,” and Sen. Sandra Pappas, DFL-St. Paul, said her partyâÄôs stance falls in line with DaytonâÄôs proposal.

Anderson said the DFL has supported raising taxes on the wealthy for the last two years.

“We need to restore fairness to our tax system,” she said.

Anderson said DaytonâÄôs speech was in large part positive. “He showed a lot of resolve to create jobs and improve education, despite obstacles,” she said.

But Zellers and Koch criticized Dayton for being pessimistic about MinnesotaâÄôs future.

Sen. Gen Olson, R-Minnetrista, agreed, calling DaytonâÄôs speech a “downer.”

Olson said the governor should have focused on positives, like MinnesotaâÄôs lower than average unemployment rate.

DaytonâÄôs sternest words came when he mentioned a possible government shutdown in July if the parties failed to resolve differences, calling the notion “unthinkable.”

“It should not happen; it need not happen,” he said.

But Zellers and Koch said in their frequent meetings with the governor, discussions of a shutdown have yet to come up.

Koch said she appreciated DaytonâÄôs resolve to invest in the stateâÄôs future, although it was “a little short on specifics.”