The Minnesota government shutdown is entering its second week. The Legislature and the Governor do not appear any closer to a budget resolution and as of now, there are no negotiations scheduled. On Wednesday, the Governor sent a letter outlining two different proposals to bridge the gap. Both options included tax expenditure reform, health care surcharges, and an increase to the school payment shift.The first option also included a temporary income tax hike on individuals earning more than $1 million. The second option would increase the cigarette tax. A copy of the offer can be found here.
GOP legislators responded to the offer in a letter calling the offer a step backward and stated they do not have the votes to increase taxes. A copy of the letter can be found here.
A bi-partisan group convened by former Governor Arne Carlson and former Vice President Walter Mondale weighed in with their own recommendations yesterday. The plan calls for a combination of cuts and increased revenue, with most of the closure coming through cuts. State revenues would increase $1.4 billion through a human services surcharge, an increase in the tobacco tax to match Wisconsin’s current tax rate, an alcohol tax inflation increase and a temporary 4% increase in income tax liabilities for everyone. A copy of the framework can be found here.
This recommendation was rejected, at least in part, by both GOP legislative leaders and the Governor. Governor Dayton applauded most aspects, but disagreed with the temporary income surtax on all taxpayers. House Speaker Kurt Zellers described it as “retread of failed tax and spend policies.”