Dayton casts GOP tax cuts as giveaway to rich

Gov. Mark Dayton on Monday criticized GOP legislative leaders for putting forward a budget framework that he says would result in deep cuts in state services.

Dayton also ripped an income tax cut proposed by House Republicans that he said would benefit the state's wealthiest residents more than anyone else.

GOP legislative leaders released a broad budget outline late last week that includes deep spending cuts for health and human services programs, state aid to cities and counties, and government agencies. Dayton said the cuts are too deep.

"We're talking about the ability for the Department of Natural Resources to keep state parks open," Dayton said. "The DNR estimates that with a 20 percent budget reduction, they would have to mothball seven state parks."

Dayton also heavily criticized House Republicans for proposing to cut income taxes while making deep cuts in state aid to cities and counties.

The tax bill is the one budget bill House Republicans have released in detail. They characterized the tax cuts as helping lower- and middle-income Minnesotans.

But the Minnesota Department of Revenue and nonpartisan House researchers say Minnesota's top earners will benefit the most from the tax cuts.

Dayton is pushing a budget plan that cuts some spending, but relies largely on a tax increase on Minnesota's top earners to erase the state's projected $5 billion budget deficit.

"It bothers me that the Republicans would present this as a tax cut targeted toward lower- and middle-income families when the facts are the opposite," Dayton said. "The greatest benefit goes to upper-income Minnesota families."

Dayton said cuts in state aid to cities and counties would force higher property taxes. Republicans argue that an income tax hike would hurt economic development across Minnesota.

"It bothers me that the Republicans would present this as a tax cut targeted toward lower- and middle-income families when the facts are the opposite."

House Majority Leader Matt Dean confirmed that the House GOP tax cut plan would benefit top earners, but he said the aim is to help middle- and lower-income taxpayers.

"We're looking at what's the best way to get money into the hands of these folks and that's the easiest way," Dean said. "If there's a better way, let us know where it is to help those folks."

The strategy of including a tax cut in their budget plan helps set up a conflict between Dayton's plan to raise income taxes. But because of Dayton's objections, it's unlikely to become law.

House Republicans are also targeting cities that are represented by Democrats. Their plan would eliminate local government aid to Duluth, St. Paul, Minneapolis and Twin Cities suburbs. The plan would spare aid to rural cities which also rely heavily on the aid.

Republican Rep. Linda Runbeck, who chairs the House Property and Local Tax Division committee, is proposing to eventually phase out aid to the metro area.

"The seven-county metro area has healthy tax bases," Runbeck said. "There's no reason that over a couple of years time that they can't learn to live on that base and not be dependent on the state for a subsidy."

Runbeck said her bill would also require a property tax freeze for cities that receive local government aid. Mayors in both metro and rural areas argue the plan is aimed at dividing the state's cities.

Republican Sen. Julianne Ortman, who chairs the Senate Tax Committee, declined to comment on the House proposal. She said she will release her bill next week, but declined to provide specifics.