Column: Capitol Conversations, by Rich Murray

As I write this, negotiations continue between legislative leaders and Gov. Mark Dayton in an effort to break the state budget logjam. When session ended, the Legislature had passed a balanced budget spending $34 billion that forced state government to live within its means.

Dayton vetoed that plan. He responded with a budget that spends $36 billion, and is insisting on raising taxes by $1.8 billion in order to spend more on government programs.

A new budget offer

On Monday, the Legislature made a compromise offer that would settle half of the proposed budget. As part of the deal, the Legislature would agree to the governor’s proposed level of spending for K-12 Education, public safety and judiciary programs. This means $80 million more for our schools and $30 million more for our police and courts — so long as the governor agrees to enact some of the Legislature’s proposed reforms.

The agreement would be a win for both sides — the governor keeps his funding promises while the Legislature enacts some necessary reforms. It also means lawmakers agree with the governor on half of the total budget, and would be well positioned to finalize the remaining half by the June 30 deadline.

Governor’s proposal does more than ‘tax the rich’

Gov. Mark Dayton’s tax hike plan has been widely reported as a proposal that will only “tax the rich.” There’s actually a lot more to it.

When Gov. Dayton unveiled his multi-billion dollar tax hike proposal in February, the Department of Revenue analyzed the plan through a tax incidence report, and found that if implemented, all Minnesota taxpayers — from the poor to the rich — would be impacted. Though Gov. Dayton has since reduced the size of his proposed tax increase, Minnesotans in all tax brackets would still be affected.

While the top 2 percent of Minnesota wage earners would pay more through higher income taxes under Gov. Dayton’s plan, the Department of Revenue found that his proposed tax changes in the corporate and sales taxes would impact everyone else. In the corporate tax area specifically, the report notes that some of the increased financial burden would be borne in higher prices, and some in lower wages.

As an example, let’s say Coca-Cola was impacted by the governor’s tax proposal. The company would likely either reduce employee wages or cut jobs to make up for the financial loss, or would permanently force you to pay more for a bottle of pop. In short, the corporation will likely pass this added cost on to you.

Now apply this principle to all the corporations in Minnesota — like 3M and Ecolab — and you can see the consumer ramifications.

Other impacts of Gov. Dayton’s tax plan include expanding the sales tax to purchases made on internet sites such as Amazon.com. Online reservations made for Minnesota hotels would also be taxed, as would DVR purchases, to name a few.

So while it’s true the governor wants to tax the top 2 percent to help balance the budget, it’s worth knowing that his plan does go beyond that talking point, and that Minnesotans in all economic classes would be impacted at some point.

Budget solution needed now

Folks, this is serious business and it’s time for both sides to cut a deal. This negotiation has taken so long because the situation is so serious, but it is possible to balance the budget and take care of the neediest among us.

The government of the past cannot resemble the government of the future, and redefining government is not going to happen overnight. Small steps are better than no steps at all, and both sides need to realize this — immediately.

At the end of the day, we are one Minnesota. No one wants a shutdown, nor should there be one. It’s time for both sides to hammer out a final budget solution and get this job done.

Area visits

As we wait for Gov. Dayton to call a special session, I’ve been keeping busy with events back home. I was humbled to have been asked to speak at a pair of area Memorial Day services and attend some others, and privileged to give an address at the Glenville-Emmons graduation, as well as the National Guard deployment ceremony as our troops prepare to courageously fight for our nation’s interests in the Middle East.

As your state representative, it’s truly an honor to thank those who have served and are serving our country, and to encourage our graduates to aim high as they set their goals for the next stage of their lives.

Rich Murray, R-Albert Lea, is the state representative for House District 27A.