Lawmakers respond to positive news on state budget deficit

by T.W. Budig, ECM Capitol reporter — Democratic Gov. Mark Dayton today (Monday, Feb. 28) styled the latest economic forecast that showed a $1 billion decrease in size of the state budget deficit a good news, bad news revelation.

Democratic Gov. Mark Dayton gave President Barack Obama's economic policies credit in helping to turn the economy around. (Photo by T.W. Budig)


It’s good news, Dayton explained, because it shows the state’s economy is quickening. The bad news is thousands of Minnesotans remain unemployed.

Dayton called the now $5 billion state budget deficit “still a matter of serious concern.”

Dayton immediately adjusted his proposed state budget — he jettisoned his tempoary three percent surcharge on incomes over $500,000 and made a series other budget adjustments.

Some of the biggest provide more funding to human service programs, but Dayton also increased the research and development tax credit, restore transit funding to the Met Council, among other changes.

Dayton credited President Barack Obama’s economic stimulus strategy as a major factor in bringing around the economic recovery — a triumph of Keynesian economics, he dubbed it.

The governor also urged lawmakers to stop the delay in the repayment of about $150 million in business tax refunds crafted last legislative session.

In a letter to lawmakers, Dayton urged them “to act now to return the capital to business and help put more Minnesotans to work.”

Dayton noted the repeal would not impact the upcoming budget and is no longer needed for cash flow

Senate Majority Leader Amy Koch, R-Buffalo, explained that the smaller state budget deficit didn't change Republican priorities. (Photo by T.W. Budig)



While the governor gave great credit to the president, House Speaker Kurt Zellers, R-Maple Grove, credited businesspeople and their employees for helping to lower the projected deficit.

“No one in government should pat themselves on the back,” said Zellers.

Zellers suggested lawmakers should consider making select tax cuts this session.

He spoke of the need for providing businesspeople with certainty to allow them to make investments.

Senate Majority Leader Amy Koch, R-Buffalo, explained that news of the smaller state budget deficit did not alter Senate Republican’s approach to addressing the budget.

“Our priorities remain the same,” she said.

Koch spoke of fostering job creation, spending cuts, government reform.

She was “very pleased” the governor had thrown out his proposed income tax surcharge, explained Koch, but added that Dayton’s other proposed tax increases would still place the state at the top of list of high tax states.

The Republican House and Senate have yet to produce their proposed state budgets.

House and Senate finance committee budget deadlines are March 25.

Dayton suggested it was hard to judge his proposed budget without having something to compare it to.

House Minority Leader Paul Thissen, DFL-Minneapolis, urged Republican to speedily present their proposed state budgets.

Dayton’s  adjusted proposed state budget still contains about $765 million in budget cuts, according to an administration official.

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