Democrats argue over tax increases during MPR debate

With just three weeks to go before the Aug. 10 primary, the three DFL candidates for governor are ramping up the attacks on one another.

Minnesota House Speaker Margaret Anderson Kelliher, former Sen. Mark Dayton and former legislator Matt Entenza participated in the debate on MPR's Midmorning program Tuesday, and discussed their solutions to balance the state's budget, improve schools and create jobs.

The hour-long debate featured a feisty Mark Dayton criticizing his opponents for not offering specifics on how they would balance the state's budget, which is projected to be short by nearly $6 billion in the next two-year budget cycle.

Margaret Anderson Kelliher and Matt Entenza, in turn, labeled Dayton's plan the old way of doing things. Throughout most of the hour, Kelliher and Dayton acted like the two frontrunners, engaging in a spirited give and take and talking over each other.

Right from the start, Kelliher and Dayton disagreed over which Minnesotans should face income tax hikes. Dayton wants to raise the taxes of couples making more than $150,000 a year and individuals earning $130,000 a year. Kelliher wants higher taxes for couples who earn more than $250,000 a year.

"Senator Dayton, I've been with you for over a year as you look at cameras and say, 'I'm going to raise taxes on the wealthiest Minnesotans.' I don't think Minnesotans earning $130,000 a year or $150,000 a year, a teacher and a police officer who are married to each other, feel like they're wealthy in this state right now," said Kelliher. "Their property taxes are already going up."

"Their property taxes have been going up because you have been protecting the tax loopholes for the rich," Dayton responded to Kelliher. "We're talking about the very rich, who are allowed to pay two-thirds of their share of state and local taxes. That's why property taxes have been going up, because Tim Pawlenty and the Legislature have protected the tax loopholes for the very rich."

Kelliher said 40 percent of her plan to erase the projected $6 billion budget shortfall would rely on income tax hikes, and closing what she calls corporate tax loopholes. She said 30 percent would rely on accounting shifts and 30 percent on spending cuts and federal aid.

Kelliher then criticized Dayton for his plan, saying it would raise property taxes by proposing another tier for some property owners.

"On $1 million homes," Dayton said of his plan. "Raising property taxes on people with homes worth more than $1 million."

Dayton then attacked Kelliher for supporting what he called tax loopholes and tax cuts a decade ago that primarily benefited the wealthy.

"I think that's wrong. I think that's one of the reasons we're in these deficit situations," said Dayton. "We have overcrowded classrooms, fourday school weeks. Property taxes have gone up, Speaker, because you and the Legislature and the governor have protected the tax loopholes that allow the richest people in Minnesota to stop paying their fair share of taxes."

As Kelliher and Dayton continued to spar over taxes and budget matters, the third DFLer in the race, Matt Entenza, mostly sat on the sidelines. He repeatedly tried to rise above the fray.

"I think the important thing for the three of us is, let's put together our positive proposals," said Entenza. "I have a detailed proposal on education that says we shouldn't have No Child Left Behind, that we should have real accountability and we should move forward there. But I think it would behoove all of us to stay focused on what are the positive things that we're going to do together."

On the budget, Entenza said he would raise income taxes on couples making more than $250,000 a year, would continue a payment delay to schools and would cut spending. One of his ideas would be to have the state pay for health care based on performance and outcomes, as opposed to the number of tests and procedures.

"To get the big savings, you have to go into the tough areas -- and that's health care and human services," said Entenza, "and I believe that's what we need to do."

In terms of improving the economy, Entenza said he's committed to investing in the green energy economy and is promising an additional 50,000 jobs.

Mark Dayton said the focus should be on education, because his experience as commissioner of Economic Development in the 1980s showed him businesses are attracted to an educated workforce.

"If somebody wants cheap labor -- I've been to China. I've seen the Nike plants with people working for 60 or 70 cents an hour for 120 hours a week. That's not our future," said Dayton. "Our future is the same as the past. It's building a foundation of a good state economy of the best quality public education."

That comment prompted Kelliher to say Dayton's economic ideas aren't modern enough.

"We can't think that we can go back to the 1980s. The game has changed. How businesses select to go somewhere or expand has changed," said Kelliher. "We need to be more competitive. We need to be more aggressive about our state. More small businesses. More clean energy."

Dayton responded by saying that Kelliher, as House speaker, proposed a lower level of funding for K-12 education in the last budget session than did Republican Gov. Tim Pawlenty. "Here's the truth of the matter," Kelliher responded. "Gov. Pawlenty's increase was fake, because it was based on borrowing for operating expenses in the state of Minnesota. Borrowing $1 billion. Something we have never done before."

Dayton, Entenza and Kelliher are scheduled to appear in three more debates before the Aug. 10 primary. The three will also appear at a debate on Aug. 4 at Farmfest, alongside Republican Tom Emmer and Independence Party candidates Rob Hahn and Tom Horner.

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