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GOP rejects Dayton’s two budget proposals, calling them a step ‘backwards’

GOP leaders said budget negotiations went poorly Wednesday after rejecting Gov. Mark Dayton’s two proposals to forge a deal over the state’s $5 billion shortfall.

Six days into Minnesota’s government shutdown, the governor offered two approaches to solving the deadlock:

• One would put a 2 percent income tax surcharge that would “sunset” in 2013 on Minnesotans earning more than $1 million annually, increase health care surcharges and further shift school payments into future years.

•The other would increase cigarette taxes a $1 a pack to generate $283 million in new revenue. It also would keep his first proposal’s health care surcharges and implement a larger K-12 aid shift.

 The goal is to bridge a roughly $1.4 billion gap between the GOP budget and the governor’s proposal.

Republican leaders left the roughly 30-minute meeting looking unhappy.

“Things went backwards today,” House Speaker Kurt Zellers told reporters. “We’ve made it clear that we don’t believe in a tax increase.”

Both sides have clung resolutely to their positions – the GOP says, “No new taxes” and Dayton says, “Tax the rich.”

So why did Dayton offer another round of tax increases if he knew they were a no-go? The governor says he didn’t realize the Republicans would reject his offer so handily.

In fact, when they left his office, Dayton said, he was under the impression Zellers and Senate Majority Leader Amy Koch were returning to their members to discuss the proposal.

Although Koch and Zellers said they’d bring it back to the Senate and House GOP caucuses, they made it clear the deal is going nowhere.

“A tax increase in general is a nonstarter in our caucus,” Zellers told the press. He also added that cigarette taxes are regressive, something that the governor campaigned against.

“So, where do we go from here?” a reporter asked the House speaker, who paused for a moment and looked to Koch. She took a second and reiterated they’d bring the offer back to their members.

Koch and Zellers said they made the “real effort” last week when they brought Dayton a proposal that would raise alternative revenues by bonding for payments Minnesota receives from a tobacco lawsuit settlement.

Dayton, who rejected the deal, said Wednesday it would only “increase the indebtedness of the state.”

The governor’s proposal is similar to the one that ended Minnesota’s eight-day shutdown in 2005.

It appears budget negotiations have deteriorated further since Thursday’s shutdown. Back are accusations that the other side mischaracterized what occurred in the meeting, and that’s after a weeklong “cone of silence” did little to help a deal but did cloud the public’s view.

Dayton said the “cone of silence” is over, claiming that Zellers mischaracterized their discussions concerning increased gambling revenue from racinod, a Block E casino or slot machines in bars.

The governor also said he is disappointed that the Republican leaders openly rejected his proposal to the press after they left the meeting without communicating the same sentiment to him.

He said they came to that conclusion extremely quickly after the meeting, “or at least somebody made up their mind for them.”

“If this was a step backwards, it’s because they took the step backwards,” Dayton said. “Not me.”

Now Dayton is waiting for the GOP to make a counter-proposal. He and lawmakers will work on the K-12 reform bill and Health and Human Services talks are expected to continue.

Koch said HHS was the one bright spot of the day, and the governor agreed.

“That’s the progress today,” Koch said.

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Comments (13)

  1. Submitted by Max Hailperin on 07/06/2011 - 05:04 pm.

    This article claims that “Both sides have clung resolutely to their positions” and in particular “Dayton says, ‘Tax the rich.'”

    And yet, the same article indicates that Dayton put forward a proposal in which the sources of additional revenue were not from taxing the rich.

    I don’t see how these can be reconciled.

  2. Submitted by Rachel Kahler on 07/06/2011 - 05:55 pm.

    Actually, I’m not ok with continuing to not pay off K-12. Add a tax to cigs AND another income tax tier and pay it off. As far as a cig tax being regressive, it’s a non-essential use tax. Keep sales tax away from food, but go ahead and tax clothes and services. But, since when do those two GOP yahoos think that they can speak for the entire legislature? Is that a threat or a prediction, because if it’s the former, Minnesotans have elected 2 people, not the several dozen they thought they elected.

  3. Submitted by Rob Barrett on 07/06/2011 - 06:17 pm.

    Here’s some footage from today’s press conference with Governor Dayton. The Great Minnesota Shutdown day 6, new proposal, swing and a miss.

  4. Submitted by Mike Underwood on 07/06/2011 - 06:30 pm.

    Gov. Dayton screwed up, he forgot to call those increases “fees”. They would have took the bait on that one!!!

  5. Submitted by Tom Christensen on 07/06/2011 - 06:43 pm.

    Daily, if talks fail, the Governor needs to take something off the table. He has the public behind him. It is time, at both the state and federal levels, to quit playing the Republican game of one-sided negotiations. The Republicans have misread the reasons the public sent them to the capital. It was for leadership. Fooled us because they don’t have any. The Republicans are stuck in a corner and they don’t know how to get out. Keep the pressure on Governor Dayton and the voters will finish the process in the next election.

  6. Submitted by Bill Coleman on 07/06/2011 - 06:54 pm.

    The GOP is willing to borrow from tomorrow’s tobacco proceeds for general fund spending today. That is the same way Pawlenty spent the initial tobacco lump sum revenues that could have funded endowed activities in economic development or education or something!

    Zellers rejecting tax increases on tobacco as regressive is almost comical. Glad that he is looking out for the poor. Do you think that the racino income stream would be regressive? Might be! Besides that robs the northern tribes of casino income, and having been there, I know that there are no millionaires on those reservations. While we are at it, let’s borrow some more money from school districts; we know that they are flush!

    The DFL should line people up who will lose health care and other DHS benefits under the GOP plan. They should tell their name and their story in front of the Capitol 24 x 7. Alternatively, the progressive groups should recruit volunteers to show up on the capitol grounds to signify the number of people who will lose benefits. Reportedly, 150,000 people losing health care coverage. That is almost 4 Target Field Twins crowds. All either old and/or poor and/or disabled.

    Stay strong Governor Dayton!

  7. Submitted by will lynott on 07/06/2011 - 07:02 pm.

    My, my. Once again our Governor is thinking creatively to try to break the impasse. Once again the Rs are obstructionists, not problem solvers.

    What a surprise.

    Keep at it, Gov! We need new revenue, not more ways of kicking the can down the road. So far, they’re the only ones who don’t realize how inevitable it all is.

  8. Submitted by David Greene on 07/06/2011 - 07:11 pm.

    Zellers is the most disingenuous person in the legislature, perhaps in all of government. He talks about cigarette taxes being regressive while he actively supports the very tax breaks that made our system so regressive in the first place.

    One cannot negotiate or even have a working relationship with such people. The good people of Maple Grove had better figure out that he’s not representing their interests. And quick.

  9. Submitted by William Pappas on 07/06/2011 - 08:26 pm.

    We have passed the point of absurdity. Grover Norquist runs the state of Minnesota. It will not resememble anything that most Minnesotans have lived with their entire lives. For the privlage of defeating a slight income tax for millionaires the republicans have extended the shut down. Imagine if democrats stated all spending cuts are off the table, bring us a way to balance the budget. That would not work. To say any tax increase is off the table is just as absurd. The sad thing is that these tax cuts and tax cut extensions don’t do anything to stimulate the economy. They don’t create jobs, don’t create businesses, don’t help the American worker at all. In fact their cuts will harm business growth in Minneosta. Listening to republicans talk about how tax cuts work is the stuff of fantasy. They don’t even believe it themselves anymore. But they do know their millionaire friends love them for it. The new republicans led by Koch and Zeller in our state have shamed themselves and the state. They are not interested in running government whatsoever, only tax cuts for the wealthy. Creating obligations and putting off payments simply sets up the crisis for next year and poof, there goes more programs that benefit the middle class. Disgust doesn’t begin to describe my feelings toward these very self centered, millionaire coddling, misrepresenting conservatives dominating both state and national government.

  10. Submitted by Nathan Roisen on 07/06/2011 - 10:30 pm.

    Hey, has anyone heard that the Republicans are absolutely, positively, unequivocally opposed to a tax increase? Because Zellers wanted to re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-re-reiterate that point.

  11. Submitted by Claire Lundgren on 07/06/2011 - 11:14 pm.

    Koch, Zellers, Norquist, and Sutton are a disgrace to the Gop and the true elected representatives seem unable to see that if they continue to follow their misguided directions and leadership the party will be totally destroyed. I have been a life long Republican and I find I am unable to support or even recognise these arrogant, self serving , idiots. It’s time to get rid of party caucuses. They only speak for a small percentage of the party members and are too vulnerable to financial wheeling and dealing.

  12. Submitted by Paul Udstrand on 07/07/2011 - 07:59 am.

    ““Things went backwards today,” House Speaker Kurt Zellers told reporters. “We’ve made it clear that we don’t believe in a tax increase.”

    Yes, it’s all about what you “believe” Mr. Zellers. These Republicans fail to comprehend governance on a basic level. This isn’t a church, you’re not elected to promote your beliefs, you’re elected to run the government and represent your constituents.

  13. Submitted by Paul Udstrand on 07/07/2011 - 09:00 am.

    I hope people in the business community are finally waking up and taking notice. The Chamber’s are not supposed to be arms of the Republican party, they’re supposed to represent business.

    Somewhere along the line the business community seems to have bought into the notion that Democrats are “against” business and Republican are “for” business, as if no Democrats are business people… or wealthy. This bizarre notion has warped our political landscape and promoted Republican extremism. How is a smooth running well funded government bad for business? Why is perpetual government budget crises and underfunded government good for business? What do gay marriage, abortion, stem cell research, and voter ID have to do with business?

    I hope members are giving their chambers an earful for promoting this polarization and demanding some balance in the future.

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