Editor’s note: this post has been updated with comments from Gov. Dayton and Lt. Gov. Smith.
Gov. Mark Dayton has big plans for the state’s budget surplus: tax cuts, racial equity, broadband and education.
The two-term Democratic governor released his supplemental budget plan Tuesday to spend much of a projected $900 million state budget surplus for 2016 and 2017. His budget includes $117 million in child-care tax credits and other tax cuts, $100 million to boost high-speed internet access across in Minnesota, and another $100 million in one-time spending on a number of racial equity programs, including $33 million of not-yet-committed funds to expand economic opportunities for racial minorities in Minnesota.
“Our supplemental budget prioritizes tax cuts for middle-income families and investments in Minnesota’s children, families and communities,” Dayton said while unveiling his budget.
Dayton is also proposing $77 million to boost various early education programs. That includes $25 million for a voluntary version of his signature preschool education proposal. Under Dayton’s budget, funding for the program would be split between urban, suburban and greater Minnesota school districts and charter schools and awarded based on poverty rates. That program’s cost would increase to $100 million in the 2018-2019 budget.
“Sometimes you can make progress in big, giant steps and sometimes you can make progress in slow, steady incremental steps, and what we are doing with this budget for preschool is to make some incremental steps toward preschool for all 4-year-olds and families who want it,” Lt. Gov. Tina Smith said. “We heard a lot last year about how school districts and parents don’t want this. I think what we are going to see here is that a lot of schools and a lot of parents want this.”
But with predictions of possible economic decline on the horizon, Dayton scaled back his wish list considerably. He also left about $200 million of the total surplus unspent for the upcoming budgeting year. About $411 million of his proposals are one-time spending, according to a breakdown from the governor’s office, while proposals totaling $287 million would continue to cost the state money in coming years.
“I think it’s really important that we start to protect our state government’s fiscal integrity from a future national economic downturn,” Dayton said. “That wasn’t done in the past and we saw the catastrophic consequences of that, with ongoing deficits and budget shifts, borrowing from the schools and the like.”
Dayton also proposes to pump a considerable amount of money into various programs within the massive Department of Human Services, including $28 million to increase the number of inpatient psychiatric beds, $22 million to improve client care and staff safety at the Minnesota Security Hospital in St. Peter and $4 million for biennial evaluations of offenders in the Minnesota Sex Offender Treatment program. Some of those proposals will be unpopular with the Legislature in a big election year, but Dayton said improvements at St. Peter facility is one of the most urgent in his supplemental budget proposal.
Other big items from the governor’s supplemental budget proposal:
- $47 million for a one-time increase in Local Government Aid and County Program Aid
- $46 million to improve cybersecurity in state agencies
- $44 million in investments in various state agencies
- $23 million for the state’s court system
- $56 million for operating costs and programs at the Minnesota State Colleges and Universities system and the University of Minnesota
- $34 million for compensation, security, staffing, health services in the state’s corrections system and to expand early release programs
Dayton’s budget sets the tone for the upcoming debate over how to spend the surplus with the Legislature. Democrats in control of the Senate and Republicans in control of the House will introduce their own plans in the coming weeks. Republicans have promised to prioritize spending on roads and bridges and tax cuts. Dayton said he’s open to negotiations on all parts of his budget, but he wont agree to a plan that commits too much of the state’s money in the years to come.
“I’m flexible on all of this,” Dayton said. “But I’m not flexible on the principle that we need to be very cautious in what we obligate with tax cuts and spending increases.”
|Department of Human Services||19||(39)|
|Education and Early Learning||77||405|
|Local Government/County Program Aid||47||0|
|Other Agency Investments||44||37|