Budget officials knock GOP's business tax cut plan

DFL Gov. Mark Dayton sent two of his commissioners to a Minnesota Senate hearing Thursday to highlight his concerns about a Republican-backed tax bill.

The Senate GOP measure is aimed at boosting the economy and encouraging job growth through a package of tax breaks for businesses, including a phase-out of the state business property tax. But to cover the costs, Republicans dip into the state budget reserve or direct the administration to cut spending by about $100 million.

Management and Budget Commissioner Jim Schowalter told the Senate Tax Committee that the bill would send state finances in the wrong direction.

"We have gotten through a a significant recession. We have drawn down our reserves. We have had shifts. We have weakened the financial situation of this state markedly in recent years," Schowalter said. "The last two forecasts have been positive, and they've helped us restore some of our reserves, and this bill takes us going in the other way."

Schowalter said more cuts would be hard to find. But Republican Sen. Julianne Ortman, the committee chair, told Schowalter to try harder.

"I encourage you to go back to the table, roll up your sleeves, get out your pencils, you and the other commissioners and the other managers, there are many of them, and find some savings," Ortman said. "Because I think it's there. I think every Minnesotan knows it's there, and that we can do more to reduce the size of government to encourage the prosperity of individuals and businesses in the state of Minnesota."

Revenue Commissioner Myron Frans told lawmakers that the governor is also concerned that the proposed tax relief won't actually create any jobs.

Representatives of several business groups testified in support of the bill. The House passed its version of a business tax cut bill last night on a party line vote. It pays for the tax cut by reducing a property tax credit for renters.