The Free Press, Mankato, MN

Local News

March 15, 2013

Dayton laments death of first budget, still aims for property tax relief

By Mark Fischenich Free Press Staff Writer

MANKATO — Gov. Mark Dayton lamented the death of his proposal to expand the state's sales tax -- and use much of the revenue for $500 property tax rebates to Minnesota homeowners -- but he said his revised budget retains some property tax relief, targeted investments in education and a fairer overall tax system.

Dayton, speaking in a conference call with outstate Minnesota media, reviewed his tax and spending plan after revising it to reflect an improved revenue forecast for the next two-year budget cycle and to reflect the abandonment of his ambitious plan to expand the state sales tax to services and high-end clothing.

He quoted National Hockey League Hall of Famer Wayne Gretzky in explaining that an unsuccessful attempt is better than none at all.

"You never score a goal on 100 percent of the shots you don't take," Dayton said.

Business organizations strongly opposed the expansion of the state's sales tax to services, and polling of average Minnesotans showed opposition to the idea as well -- even though the expansion would have also included a reduction in the rate. Without the extra sales tax revenue, there was no way to provide the $1.4 billion in property tax rebates -- $500 for most homeowners, Dayton said.

But the revised budget includes new revenue from a boost in the income tax on the 2 percent of Minnesotans at the top of the income ladder. It also benefits from the roughly half-billion-dollar improvement in the state's projected budget shortfall, announced by state economists in late February. Much of that new revenue is aimed at increased funding for education -- from pre-school to college programs.

The income tax increase, on individuals with taxable income above $150,000 and on couples earning more than $250,000, would hit roughly 54,000 -- including 291 in Blue Earth County. The average income of the 54,000 is $617,000, Dayton said.

The budget plan also retains $120 million in additional state aid to cities and counties, however, which should allow local government leaders to provide relief to property owners when setting their 2014 budgets, according to the governor.

The $80 million increase in Local Government Aid to cities comes with a new formula for the distribution of the aid -- a formula that was panned by many outstate cities who would do better under the existing method for doling out the state aid. Dayton said he got that message loud and clear at a recent meeting of the Coalition of Greater Minnesota Cities.

"I've never had a group of people so mad at me for giving them an additional $80 million," he said.

The Coalition is working on a distribution formula that appears to satisfy most cities and Dayton indicated he would adopt that proposal as the budget is finalized in negotiations with the Legislature between now and May. The formula in Dayton's budget for now was based largely on the recommendations of a panel of 15 mayors, said Revenue Commissioner Myron Franz.

The formula developed by the 15 mayors had the benefit of being more simple than the convoluted LGA formula used for decades, Franz said, but the alternative being developed by the Coalition of Greater Minnesota Cities appears to be one that most cities believe will be fair.

"I think it will work a little bit better, and that is the key," Franz said.

The boost in state aid should make it easier for cities and counties to hold property taxes flat next year, and income-eligible homeowners and renters could see higher property tax credits if Dayton's budget is largely adopted by the DFL-controlled Legislature.

Text Only | Photo Reprints
Local News
  • mfp Roundabout mtg.jpg Roundabout concerns, affections voiced

    Drivers had a chance to learn more about roundabout plans for two busy Mankato intersections Tuesday. They also had the chance to voice their opinions about their use instead of stop lights for traffic control.

    May 21, 2013 1 Photo

  • mfp tea party pic Local tea party group protests at IRS office

    |MANKATO — Andy Johnson has been waiting for several years to ask the Internal Revenue Service for tax-exempt status for his group, Southern Minnesota Tea Party. His plan was to wait for the Rochester group to get that status, then copy their paperwor

    May 21, 2013 1 Photo

  • mfp fire autism 3 pic.jpg Scary environment turns into a safety-centered one

    Specialized training familiarizes kids who have autism with firefighters and vice versa.

    May 21, 2013 3 Photos

  • mfp robb colum pic Sad closure for a favorite story

    By the time I met Judy Roe, it was already too late. I met her at a dinner table at Pathstone Living, an assisted-living and nursing home facility near Sibley Park in Mankato. I'd been invited by her husband, Jim Roe.

    May 21, 2013 1 Photo

  • N. Kato seeking consultants for major plan

    The North Mankato City Council set the stage for two long-term plans Monday night, one for economic development and the other a comprehensive plan.

    May 21, 2013

  • Repairs to ruts, roads underway Q: I have noticed deep, muddy ruts along sidewalks that were plowed by, I assume, the city. I have seen them quite a few places, including in my neighborhood along Hoffman Road. The grass is gone and the ruts are deep -- deep enough for someone to br

    May 21, 2013

  • Mankato Schools employees recognized MANKATO -- The Mankato Area School Board got to know a few of its employees a little better Monday night when they were recognized for many years of service. Bios were read aloud by Board Chair Ann Hendricks for employees who have worked 30 and 35 ye

    May 21, 2013

  • Mankato earns GreenStep designation from state departments

    The city of Mankato has taken another step in Minnesota's sustainable cities program, earning the Step Two GreenStep City designation for its efforts to reduce energy use and implement other measures aimed at sustainability.

    May 21, 2013

  • St. Peter surplus on auction block

    Listings of the city of St. Peter's surplus property are available from an online: www.fss.state.mn.us/SurplusServices.html. Friday is the deadline for bidding.

    May 21, 2013

  • N. Kato approves $150K water project

    |The North Mankato City Council approved a $149,840 bid on Monday to coat the interior of a water tower. Maguire Iron, Inc., of Sioux Falls, made the lowest of eight bids.

    May 21, 2013