Politics & Government

Governor Dayton's Budget Scrutinized During First House Hearing

"This budget looks, to many of us, like it's a good deal for government, like it's a good deal for bureaucracy, but it's a bad deal for small businesses and it's a bad deal for the private economy," Rep. Matt Dean said.

Job creation, tax rates and even the accounting practices themselves were questioned Monday as a meeting of the House Ways and Means Committee offered several lawmakers their first opportunity to weigh in on Gov. Mark Dayton’s budget proposal.

Minnesota Management & Budget Commissioner Jim Schowalter and State Budget Director Margaret Kelly said that “focusing on results” was the mantra state agencies used when putting the proposal together.

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“Really, that is an objective here of looking at what we’re buying, not just the cost of it, but really looking, literally, at what are the results,” Schowalter said. “Does the system work? Does it get the public the results we want?”

Lawmakers expressed concerns about specific proposals, but also the impact of the budget as a whole.

Rep. Matt Dean (R-Dellwood) said many people consider the budget “a job killer” that raises taxes on more people, making it more difficult for families and small businesses to purchase things, putting Minnesota at a competitive disadvantage with neighboring states where governors are lowering taxes.

“This budget looks, to many of us, like it’s a good deal for government, like it’s a good deal for bureaucracy, but it’s a bad deal for small businesses and it’s a bad deal for the private economy,” Dean said. “The question is real simple: Have we really looked at how many jobs this is going to kill in the private economy in the state of Minnesota?”

Schowalter said that was the core question for the Legislature, and the governor: How could the state sustain, or expand, its competitiveness in the current economy, and move forward?

He said the governor had thought “long and hard” about the question, and that although the business-to-business taxes and broadening of the tax base were “a difficult tradeoff,” with the sales tax rate reductions and proposed investments in things like education, they would position Minnesota workers well for the future and keep the state growing faster than many of its neighbors.

Rep. Denny McNamara (R-Hastings) questioned one of the slides shown during the presentation, which listed “$225 million of reductions and reallocations in the proposed budget.” Citing a $4 million cut to the Land and Minerals Division budget, he asked whether that was included as part of the $225 million total? When told it was, McNamara asked how much of the rest of the total was a reallocation rather than a cut?

“I want to know how many really are cuts, and how many are camouflage,” he asked.

Schowalter said reallocations were “absolutely not” the entire $225 million total and that more detail would be provided as the numbers were further scrutinized through the committee process.

Other budget issues raised by committee members included:

• Whether consideration was given to changing Minnesota’s liquor tax given the impacts of alcohol on public health

whether the quarter-cent sales tax increase proposed for transit in the Twin Cities metropolitan area was solely for new projects, or for operating costs; and

• whether it was fair that only the metro area pay for those transit costs.

- Jonathan Mohr of Minnesota House of Representatives Public Information Service contributed to this report.


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