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Capitol Chatter: Debates continue over Dayton budget impact

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ST. PAUL – Gov. Mark Dayton’s budget proposal continues to play out in interesting ways, usually with Republicans strongly opposed and Democrats more mildly in support.

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Rep. Matt Dean, R-Dellwood, told a top Dayton official that the budget, especially the tax increase portions, “makes it more difficult to compete” with states nearby where governors are trying to lower taxes.

“This budget looks to many of us like a good deal for government,” Dean said, but not for business or the average Minnesotan.

Rep. Pat Garofalo, R-Farmington, took it a step further in a public television “Almanac at the Capitol” debate with Rep. Ryan Winkler, DFL-Golden Valley.

The Republican warned against electing Democrats to control the Legislature and governor’s office before last year’s election because “if you have government without guard rails, they were going to go totally out of control.”

He said that is happening, and illustrated the point by saying a North Dakota Democrat suggested that state eliminate sales tax on clothing at a time when Dayton wants to tax clothing costing more than $100.

“The retail businesses in a place like Moorhead and border communities will be destroyed,” Garofalo said. “We can’t do this.”

Winkler echoed the Dayton administration by saying that it is important to pass a balanced budget, and the Dayton budget is the first one in years that has a chance to pass.

Commissioner Jim Schowalter of Minnesota Management and Budget said “it is a difficult tradeoff,” but the tax increases are needed to balance the budget.

“We have heard over and over about the competitive advantages the state has...” he said, adding that the Minnesota economy “has been growing faster than those in surrounding states.”

And, he said: “The governor did think about that long and hard and came up with his recommendation as difficult as it is.”

Dayton himself has said that he does not like all of his own proposals, but they are needed. He said he knows people will not like it all.

Rep. Steve Drazkowski, R-Mazeppa, did not disappoint: “I haven’t found any of the plan that I like so far. ... There are job killing proposals throughout this.”

A taxing decision

It might be good for Minnesotans to delay paying their income taxes this year.

Major tax changes Congress and President Barack Obama made as 2012 ended will affect many Minnesota taxpayers. A state bill, called tax conformity, is in the works to make Minnesota law match federal law, but little has happened with it in the Legislature.

If tax returns are filed before the conformity bill passes, some Minnesotans may have to file an amended return to get their due after the bill passes and state tax law changes.

“When possible, the department will work to make adjustments, but there will most likely be some situations where the department would not be able to adjust the return,” the state Revenue Department said in a statement issued to Forum News Service. “In those cases, the taxpayer would need to file an amended return if they file prior to legislative action on federal conformity.”

The conformity issue arose at about the same time the Revenue Department issued a news release proclaiming: “2012 Minnesota income tax filing season begins.” The department now is accepting income tax returns.

Farmin’ Franken

Sen. Al Franken urges colleagues to pass a new five-year farm bill after missing last year’s deadline.

Franken, D-Minn., said he is optimistic that House leaders, who blocked debate of a farm bill in 2012, will be more open to the legislation this year.

But the top House Democrat on the Agriculture Committee said people should not expect rapid action.

U.S. Rep. Collin Peterson, D-Minn., said he does not expect farm bill action until April or May.

Franken, meanwhile, said Senate leaders are making the farm bill a priority.

“The measure is critically important to farmers, ranchers and businesses across Minnesota, where one in five jobs are supported by agriculture,” Franken said. “A new five-year measure will give our producers the certainty they need to invest and plan their operations. The current extension doesn’t give them that.”

Dayton to travel

The governor will lead a trade mission to Germany, Sweden and Norway June 12-21.

Stops will include Berlin, Dusseldorf-Cologne, Oslo and Stockholm on a trip designed to expand Minnesota trade with the countries and attract investors.

“Germany, Sweden and Norway are vital trade partners that account for nearly $1 billion in annual exports from Minnesota and have recently created new jobs in Minnesota through foreign direct investment,” Commissioner Katie Clark Sieben of the Minnesota Department of Employment and Economic Development said. “This trade mission will identify new customers interested in buying Minnesota’s high-quality products and attract foreign investors to our medical device, bioscience and renewable energy industries.”

Minnesota exported $20 billion worth of goods worldwide in 2011.

The Minnesota Trade Office will accept applications for the trip, with an estimated $7,500 per-person cost, from Minnesota-based organizations.

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Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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