High-wage earners would pay $1 billion more in income taxes, all Minnesotans would pay sales tax on pricier clothing and homeowners would see $500 yearly rebates under Gov. Mark Dayton's budget proposal, released Tuesday.
The sweeping changes would remake the state's tax system, taking some burden off property taxes and broadening the sales tax to more goods and services. High earners would pay more, the DFL governor said, to bring fairness to a system that favors the wealthy.
Dayton said his goals are twofold: to generate needed revenue, but also to make the tax system more fair and better suited to an increasingly service-based economy. The sales tax would broaden its reach, but the statewide rate also would drop to 5.5 percent from the current 6.875 percent. He would also increase the cigarette tax by 94 cents a pack, primarily as a way to discourage smoking.
"These are just common-sense changes that are going to benefit the vast majority of people," Dayton said as he laid out his proposal.
K-12 schools and higher education would get the biggest boost they've seen in years, with more money for all-day kindergarten, special education and classrooms. Colleges would get a 9.6 percent funding bump, with money to pay out awards to thousands of students and create 10,000 paid internships and apprenticeships.
A longtime believer in early education, Dayton would set aside more than $90 million over the two-year budget period to fund scholarships for low-income families to access quality early learning programs and child care.
The court system, which has long complained that it lacks the funds to deliver justice swiftly, would get more than $70 million to maintain core services, tighten safety measures, reduce backlogs for public defenders and improve the state's crime reporting system.
Dayton repeatedly said his plan was a starting point for discussions to come, and legislative leaders -- on both sides -- and others appeared to take him at his word.