Dayton budget put focus (and dollars) on education

ST. PAUL — Gov. Mark Dayton wants Minnesota to collect and spend $41.2 billion from state taxpayers in the next two years, without a general tax increase.

As always for Dayton, key in his budget proposal released today is increasing education funding, this year with a focus on expanding early childhood programs.

"Minnesota's future success — and health of our families, the vitality of our communities and the prosperity of our state — will depend upon our making excellent education available to all Minnesotans," Dayton said. "That is exactly what my budget proposal aims to do."

More than half of the spending increases Dayton proposes would go to education programs.

Revenue Commissioner Myron Frans said the state is in a better fiscal state than it has been for years.

Featured in Dayton's education funding plan, a major part of the overall budget, is free pre-kindergarten programs and more money for public schools. He also wants $100 million available for child-care tax credits that can be used for working families.

The governor proposes to give the University of Minnesota $93 million more to continue a tuition freeze.

However, he said he would withhold new money for the Minnesota State Colleges and Universities system until a faculty-management dispute is resolved. Leaders on both sides have said they are working toward an agreement, Dayton said.

The administration says 300,000 students would be helped by his proposed tuition relief.

Dayton's budget would spend $30 million on improving broadband Internet service, especially to rural Minnesota. That is $10 million more than in the last two years.

The budget plan would assess railroads $33 million in the next two years while the state would borrow $43 million to improve rail safety across the state. Much of that would be centered on tracks that carry North Dakota oil through Minnesota.

Dayton said some of the money he wants the state to borrow would be used to provide better rail crossings at the Prairie Island Indian Community, Willmar and Moorhead.

Dayton did not call for new general taxes, unlike two years ago when he and a Democratic-controlled Legislature approved a $2 billion tax increase. On Monday, however, he did propose a new gasoline tax and some fee increases for transportation.

After laying out a few specific proposals in recent days, the Democratic governor announced his complete budget proposal today. It will be the basis for state officials' main job this legislative session: approving how much is collected via taxes and how that money is spent.

Democrats who control the Senate and Republicans who run the House will work off of Dayton's plan when they draw up their alternatives.

The state budget is expected to have a $1 billion surplus, although that would disappear if state agencies added in inflation. However, they are expected to work most inflationary increases such higher pay, utility cost increases and the like into existing budgets.

Many state officials expect a new state revenue report in slightly more than a month to show a larger surplus, giving legislators and Dayton more money to spend.

Even before today's budget rollout, Dayton laid out some of his proposals for new spending, totaling more than $660 million. He would spend more than half of the surplus in education funding, focusing on young children.

The governor last week said he wants to spend $372 million on early childhood programs and other education needs.

Dayton has talked for weeks about his desire to provide a child-care tax credit. He has proposed $100 million for giving households earning up to $124,000 annually tax breaks to pay for care for children, as well as the disabled and elderly.

Also dealing with youths, Dayton proposes a $44 million expenditure for families in need. He also wants a $116 million bump for adult human services programs.

For the University of Minnesota, he suggests increasing spending $30 million so the medical school can improve its research efforts.

On Monday, Dayton unveiled a plan costing about $11 billion for transportation projects over the next 10 years. Most of that money would not come from general tax funds, but from special tax increases such as a new gasoline tax.

The budget plan Dayton released Tuesday is for state programs funded by general tax revenues. However, when federally funded state programs and other revenues are considered, the all-accounts budget can nearly double the taxpayer-funded portion.