Gov. Mark Dayton's unveiling of the revised state budget came with a proposed tax hike for Minnesota's wealthiest citizens as expected.
It was a crucial component of his campaign, and Dayton made good on his promise to seek a fourth-tier income tax bracket affecting the top 2 percent of earners.
While the revised budget is also notable for what it doesn't contain -- more sales taxes, that hasn't stopped Republicans at the Capitol from saying the budget is "government gone wild."
The governor's $37.9 billion budget does not include any sales taxes on clothing, nor does it include a $500 property tax rebate or freeze in state-wide property taxes.
"Well, it's not as bold as it was before," Dayton said to laughter.
That's because an improving state economy is bringing in more revenue; although, it's still not enough to balance the deficit.
Recent numbers projected the deficit would shrink to $627 million from $1.1 billion. Even so, Dayton warned lawmakers not to expect a drastic deviation from his original plan to ask couples making $250,000 and individuals making $150,000 to pay an income tax rate of 9.85 percent.
According to Dayton, creating a higher income tax bracket would result in over $1 billion in new revenues.
Dayton is also continuing to pursue a tobacco tax increase that is projected to bring in another $748 million despite concerns that it may be regressive by disproportionately affecting lower-income residents.
Senate Majority Leader Tom Bakk released a statement following Dayton's budget announcements.
"Today, the governor reinforced our shared commitment to work together on passing a fair and honest budget that puts the last decade of deficits and borrowing behind us, and moves Minnesota forward on the path to a growing middle class and long-term economic prosperity," he said. "The Senate plans to release its budget targets next week, and we look forward to hearing from the public as we work with our colleagues in the House and with Gov. Dayton on building a straight-forward and responsible budget that reflects our common goal for a better Minnesota."
Also in line with his previous plan, Dayton is asking lawmakers to put money into an existing program that provides property tax rebates and bolsters a property tax credit for Minnesota renters.
Dayton's budget also includes a controversial snow bird tax on the incomes of those who live in Minnesota less than six months out of the year.
If Dayton's budget is approved as-is, he says it will balance the budget and create a $167 million surplus in the next biennium while paying for early education programs and all-day kindergarten.
"I think it's a balanced approach, as I said before," Dayton said. "It's a balance of revenue increases, raising taxes only on the wealthiest 2 percent of Minnesotans and also making investments that will pay off for a better Minnesota."
Republicans, however, argue that a recovering economy removes the need for new taxes.
"We don't think this is right for the Minnesota economy, right for the people of Minnesota," said Senate Minority Leader David Hann. "It's kind of government gone wild. It's close to spring break. It's taxapalooza."
Dayton, however, argues that no budget plan without a tax increase would work.
In regards to the school shift, however, his new budget doesn't change anything immediately, but it will pay it back in 2016 to the tune of $1.2 billion.