Horner targeted by opponents in gov debate

A day after announcing he would address Minnesota's $5.8 million budget shortfall by combining spending cuts with expanded sales taxes and higher taxes on alcohol and tobacco, Independence Party gubernatorial candidate Tom Horner became a clearer target for his opponents.

In a debate sponsored by the Minneapolis-St. Paul Business Journal, Democratic gubernatorial candidate Mark Dayton accused Horner and Republican nominee Tom Emmer of giving the wealthy a free ride.

Emmer sees no need for more tax revenue, and instead wants to solve the state's budget woes by cutting spending.

In contrast, Dayton wants to increase income taxes on the top 10 percent of wage earners in Minnesota.

"Neither of you want to raise personal income taxes on someone making $500,000, or $1 million or $10 million a year -- one dollar," Dayton said during the debate at the University of St. Thomas in downtown Minneapolis. "Instead, you want to raise taxes on working Minnesotans."

He also said Horner's proposed broader sales tax would hurt the middle class.

Horner wants to lower the sales tax rate by 1 percent to 5.875 percent, but extend the tax to cover clothing and as yet unspecified personal services. He disputed Dayton's claims that expanding the sales tax to clothing would be regressive.

"We're going to put in protections for low income," Horner said. "I've set aside $350 million in my budget to protect low income. We're not going to tax essentials like food, medical services, prescription drugs."

Horner said Dayton's income tax plan would hurt small businesses and the middle class, and cost Minnesota jobs.

"When you kill the job creators, you kill jobs," Horner said. "When you tax small businesses at the rate you're proposing, you do send Minnesota businesses out of the state. We can't afford that."

In response, Dayton cited Minnesota Department of Revenue statistics that showed 92 percent of small business don't report enough income to pay higher taxes under his plan.

Dayton also criticized Emmer's focus on cost-cutting without additional taxes, saying that would lead to property tax increases.

At one point during the debate, Dayton challenged Emmer to provide specifics on how he would cut government spending to balance the budget.

"I don't want just a couple of anecdotes," Dayton said.

Emmer did not detail specific cuts, but instead complained about the overall size and scope of government.

"You folks talk about cutting all the time, and yes there will be small government if we are elected and are in office. There's no question," Emmer said. "But why is it the assumption is there will be less services that people expect from government?"

All three candidates said state regulations need to be streamlined to help create jobs.

Both Horner and Dayton said the state should invest in public education and build more partnerships between industry and schools.

"We're fortunate in Minnesota that we have one of the finest research universities in the country. We need to strengthen it, we need to make it better, but we also need to fund it in specific areas," Horner said. "We need to make research a separate line item in the state budget."

Said Dayton: "For example, in Roseau you've got Polaris Industries. They take high school students -- juniors and seniors -- and they spend their mornings in classes, they spend their afternoons training at Polaris," Dayton said. "Those are the kind of linkages we need to encourage."

But Emmer derided the notion that government should steer growth and innovation. Instead, he said, government should step aside.

"You know what? This country was not built by government. It was built by people," Emmer said. "We need to take the yoke of government off of the economic horses of this state and let them start to run again, and start talking about people in the private sector that will take risks to move our economy forward."

The three candidates for governor meet again for another debate Wednesday morning.