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Dayton Delivers Budget that Keeps Promises to Minnesotans

February 15, 2011

Fair, Responsible, Balanced Budget invests in K-12 Education, public safety, and proposes no property or income tax increase on Middle Class Minnesotans.

St. Paul, MN – Governor Mark Dayton today unveiled his FY12-13 Budget, keeping his promises to increase funding for education, hold down property taxes, and reform state government to maintain core services.  Dayton’s fair, responsible, and balanced budget ensures no tax increase for 95% of Minnesotans while raising revenue to address our state’s financial crisis and lingering deficits.

Dayton said, “I have always said that a budget is about values and priorities, as well as dollars and cents.  My budget represents my values and priorities, one of which is to keep my promises that I made to the people of Minnesota last fall.”

Significantly, the budget includes an increase to K-12 education to fund an optional, all-day kindergarten program.  The budget also reforms education spending to better target funds by rewarding excellence and incentivizing innovation, including the creation of the Governor’s Award  for Excellence in Education and the Achievement Gap Innovation Fund, both targeted toward improving student learning and rewarding outcomes.

The Governor’s budget also ensures no state-forced property tax increases on average Minnesotans, with no reductions to local aids and credits, and the continuation of the renter’s credit.  Local Government Aids (LGA) are crucial to services like police and fire, plowing and street maintenance.  Continuing these payments is crucial to preventing huge property tax increases – the most regressive and unfair of all state and local taxes.  The Revenue Department estimates that every dollar the state cuts in LGA causes a 67 cent increase in local property taxes.

Dayton’s budget also makes targeted cuts, while protecting core services and the foundations for our state’s growth.  It includes protecting the State Grant program for Higher Education from cuts, while cutting the State’s Colleges and Universities by six percent, mitigating tuition increases.  Dayton’s budget also reduces the size of government, reducing state employee positions (FTEs) by six percent.

Dayton’s proposal also focuses on reform and innovation by defining performance objectives for state agencies, improving management, and increasing the value for taxpayer dollars.  The budget reforms managed care and reduces administrative expenses, provides for assessment of state performance, and seeks to move at the speed of commerce by processing filings more quickly and efficiently.

Dayton’s budget is balanced just as he outlined in his campaign – by requiring high income Minnesotan’s to pay their fair share of income taxes.   Dayton keeps his promises to low- and middle-class Minnesotans -- 95% of Minnesotans will experience no tax increase as a result of Dayton’s budget.  Dayton proposes a new 4th income tax tier at 10.95% for joint filers over $150,000 and head of household filers over $130,000; and a temporary income surtax of three percent for all filers over $500,000.  He also proposes a statewide property tax on home values over $1,000,000.  In addition, Dayton’s budget promotes tax equity and closes numerous loopholes that allow businesses and residents to file taxes outside of Minnesota.  A spreadsheet outlining the impact on Minnesotans -- including the 95% of all Minnesotans who will receive no increase as a result of this proposal -- is attached.

Dayton’s budget also addresses the chronic shortfalls that have plagued our state for the past few years, and makes significant progress toward achieving structural balance and ending the cycle of deficits.

A complete copy of Governor Dayton’s budget can be viewed at http://www.mmb.state.mn.us/gov-bill-11.

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Additional materials:
- Keeping our Promises in E-12 Education
- Keeping our Promises for Protecting Minnesotans’ Health
- Providing the Best Value for Taxpayers’ Dollars
- Protect Low and Middle-Income Minnesotans From Property Tax Increases
- Governor Dayton’s FY 2012-13 Biennial Budget Presentation: Fair, Responsible, and Balanced
- Protecting the Middle Class - Real World Tax Impact