Dayton’s Budget: $2.1 Billion in Added Taxes

ST. PAUL (AP) - Minnesota Gov. Mark Dayton hopes to raise $2.1 billion more in state taxes, partly by subjecting more items to the sales tax in a tradeoff for a lowered rate.

The Democrat's proposal Tuesday covers the waterfront in taxes. It would hike the amount owed on income above $150,000 for single filers, subject high-end clothing to the sales tax and raise cigarette taxes by 94 cents per pack. But he also wants to cut the corporate tax and provide property tax rebates of up to $500.

It's all contained in a two-year plan that would fuel about $38 billion in state spending. It includes a promise to schools to add $52 more in aid per student.

Dayton is proposing Minnesotans pay a lower overall sales tax rate but that it should be applied to more goods and services including clothes over $100.

The budget blueprint Dayton is unveiling Tuesday proposes big changes to the state's sales tax. It would apply the sales tax to some items now exempt, but those purchases would remain e exempt if they are under $100.

More things would be subject to the state sales tax, but its overall rate would drop from the current 6.875 percent down to 5.5 percent under Dayton's proposal. That's a 20-percent decrease, which Dayton's office says is the largest in state history.

They say Minnesota would go from the 7th highest sales tax rate to the 27th highest among U.S. states.

Dayton wants the state to spend an extra $52 per public school student.

That jump is part of a more than $600 million increase in education spending that Dayton is seeking for the state's next two-year budget, which he outlined Tuesday morning.

Dayton is also pushing for more money for all-day kindergarten programs, early education scholarships and for the state's public universities and colleges.

The governor says his education investments are necessary to improve Minnesota and its economy. His plan for more education spending accounts for almost two-thirds of his proposed state spending increases.

Dayton has made funding K-12 education a top priority for his first term. He's pledged to increase funding every year in office.

Dayton's plan is the starting point in a debate likely to reach into May.