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DFL candidate for governor Dayton: Raise taxes on wealthy

Sandra Curtis of Akeley, business agent for AFSCME Council 5, introduces former Sen. Mark Dayton on Thursday at a forum held at Bemidji State University and sponsored by the union. AFSCME, which represents government workers, was an early endorser of Democrat Dayton's candidacy for governor. Pioneer Photo/Monte Draper

Former U.S. Sen. Mark Dayton unabashedly says he'll raise taxes as Minnesota's next governor. But only on the wealthiest 10 percent, whom he says has benefited under Republican tax policies.

"I am not going to raise taxes on everyone," he said Thursday during a meet-and-greet at Bemidji State University. Current Republican Gov. Tim Pawlenty "has raised taxes on everyone. Despite what he says, property taxes have gone up and local government services have had to be cut."

Democrat Dayton says, as governor, "I will raise taxes on the wealthiest 10 percent of Minnesotans. "They are not paying their fair share. In fact, the wealthiest 10 percent are paying only about three-fourths of their proportionate income in state and local taxes."

Minnesota would fare better with a flat tax, where all taxpayers pay at the same percent rate of income, which would garner $3.8 billion more a biennium, Dayton said. "A flat tax would be a huge improvement here in Minnesota."

In an interview, Dayton said he isn't advocating a flat tax but said the state would be better off than now. Instead, he would keep the state's progressive tax system but restore - and even go higher - on the tax rate for the wealthy. Currently, the 80 percent in the middle pay 12.2 percent of their incomes in state tax while the wealthiest 10 percent pay 9.6 percent.

"I'd like to make it progressive," he said. "I'll be pushing to make the overall tax system progressive, so that the wealthiest 10 percent pay a higher percentage of their incomes in state and local taxes."

Some DFL candidates want to restore the tax cuts made in 1999 and 2000. "I oppose that," says Dayton. "That's my difference with the Senate DFL, and with all due respect to (Sen.) Tom Bakk, who chairs the Senate Taxes Committee and is one of the other candidates, he wants to raise everybody's income taxes."

Restoring the tax cuts would raise everyone's taxes, he said, when tax increases should only affect the top wage-earners. "That's my first and foremost plan, and then we'll see what the deficit is at that time."

Looking at what could be a $5 billion to $7 billion deficit in the next biennium, it's doubtful that an increase in taxes will be enough. "That's going to take care of most of the problem, if not all the problem, depending on the economy. ... I don't have a complete formula or complete plan at this point, and I'll be developing that ... but that's my starting point."

Dayton, who will bypass the DFL endorsement process and go directly to the Sept. 14 primary, already has major union endorsements from AFSCME Council 5 and Teamsters Joint Council 32. AFSCME hosted Dayton's visit Thursday to BSU, the second day of his 87 counties in 87 days tour after announcing his candidacy Wednesday.

"You want to know where the money's coming from to increase state funding for K-12 education, for public colleges and universities, to fund local government aids so we're not slashing local government services and raising property taxes?" Dayton asked the group of about 30 people in the Beaux Arts Ballroom.

"Then read my lips, tax the rich," he said to a round of applause.

Dayton, who held three state agency commissioner posts in the 1980s under the late Gov. Rudy Perpich, said Pawlenty has helped sink Minnesota in national quality of life rankings.

Pawlenty "has abandoned this state for his own political ambitions," said Dayton, referring to Pawlenty's potential bid for president in 2012. "We've got 214,000 Minnesotans without a job, and he doesn't even work at the one he has."

The only thing he'd unallot is half of Pawlenty's salary for leaving the state to make speeches elsewhere, and most of Lt. Gov. Carol Molnau, "who no one has seen in a year," for not showing up to do their jobs, "while you show up every day and work hard and then they tell you to take involuntary leave," Dayton told the union members. "I can't think of anything more unjust and unfair than that."

Dayton said his commitment as governor "is to help restore Minnesota's greatness by giving our people the opportunity to be great again. It means first and foremost increasing state funding for public education. ... I've made a promise that if I'm governor, I will increase state funding for public education every year I'm governor - no excuses, no exceptions."

Students at Minnesota's two-year public colleges have the fourth-highest tuition in the nation, he said. At state universities, tuitions are in the top 10. For the first time, tuition pays more for institutional support than the state.

"College is unaffordable for so many young people and their families in this state because of the failure of state government to provide resources," Dayton said. And in K-12 education, class sizes are rising and school districts need to rely on operating levies to fund services.

Dayton is one of 11 Democrats in the race for governor, and the front-runner in several polls. He chose not to seek re-election as U.S. senator in 2006, a seat then won by fellow Democrat Amy Klobuchar.

On Thursday, Dayton said he'd also:

- "Go anywhere, see anyone" to find new jobs for Minnesota, including wooing companies with state subsidies.

- Would use federal highway bonds to help pay for Minnesota transportation projects and transit, ending the Legislature's practice of paying cash for projects.

- Alleged that the state Department of Transportation isn't following affirmative action hiring on projects and would seek enforcement from the proper agencies.