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State of State: Dayton talks taxes on wealthy, Mayo Clinic expansion

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ST. PAUL — Gov. Mark Dayton renewed his call for raising taxes on the wealthiest Minnesotans, voiced support for legalizing gay marriage and touted Mayo Clinic's $6 billion expansion plan Wednesday in his third State of the State address.
During the 43-minute speech, the DFL governor blamed income tax cuts passed in 1999 and 2000 for helping contribute to the state's long-term budget woes. With the state facing a projected $1.1 billion deficit, he said it will require both spending cuts and revenue increases to solve the problem. In his budget, Dayton has proposed raising income taxes on the wealthiest 2 percent of Minnesotans and extending the sales tax to clothing over $100 and services, while lowering the overall rate by 20 percent.

"When people who have the most pay the least, this state and nation are in trouble," Dayton told a joint session of the Legislature. "When lobbyists protect tax favors for special interests at the cost of everyone else's best interests, this state and nation are in trouble. My goal is to get us out of trouble."

He emphasized that his budget would spend $1.8 billion less in the next two-year budget cycle than had been forecasted to be spent when he took office. He also took a shot at Republicans for failing to support construction projects such as Rochester's Mayo Civic Center expansion when they were in charge.

"Despite a lagging construction industry and good Minnesotans in the building trades unable to find work, (Republicans) just said 'No,'" Dayton said.

Republicans said the speech illustrated the governor's misplaced priorities with its emphasis on raising taxes during fragile economic times.

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"This was extremely disappointing," said Rep. Greg Davids, R-Preston. "This is taxes gone wild, and when he says it's a balanced approach, it's not. It's not balanced if it's all spending increases and no spending cuts."

Democrats praised the governor for being willing to honestly tackle the state's budget problems and invest in areas that are key to the state's future success.

"He is saying, 'Roll up our sleeves, let's get some work done and move Minnesota forward.' Bottom line, it's on all of us," said Rep. Jeanne Poppe, DFL-Austin.

Dayton reiterates support for Mayo expansion

There was one area of bipartisan agreement among area lawmakers — Republicans and Democrats interviewed said they were very pleased to see the governor reiterate his support for Mayo Clinic's Destination Medical Center. The governor made a point of recognizing Mayo Clinic President and CEO Dr. John Noseworthy, who was in the audience as a guest of House Speaker Paul Thissen. He also thanked Mayo Clinic "for giving Minnesota this chance to partner with them and help assure their world pre-eminence for decades to come in Rochester, Minnesota."

Assistant Majority Leader Kim Norton, DFL-Rochester, said she appreciated the governor's statement.

"That was really nice. I think he was showing his serious concern about Mayo Clinic's health and their growth and their growth here in Minnesota," she said.

Mayo Clinic is asking lawmakers for more than $500 million to pay for public infrastructure that would support its plans to expand in Rochester. As part of the deal, the clinic has pledged to spend $3.5 billion over the next 20 years and leverage an estimated $2 billion in private investment. Funding for the infrastructure would come from the increased state taxes generated by the clinic's expansion. Norton plans to introduce the Destination Medical Center bill today in the House, and Sen. Dave Senjem, R-Rochester, plans to carry it in the Senate.

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Noseworthy said in an interview after the speech that he was honored to be invited to the Capitol for the State of State address and to have the clinic's project mentioned by the governor.

"We are very pleased to have the governor express support for the proposal, and we look forward to working to make it a reality, to make Minnesota a destination site for health care," he said.

Dayton speaks out for gay marriage

The governor also voiced his strong support for gay marriage.

"I want Minnesota to be a state which affirms that freedom for one means freedom for everyone, and where no one is told it is illegal to marry the person you love," Dayton said.

The governor's declaration comes as gay marriage supporters are ramping up their lobbying efforts to pass legislation legalizing same-sex marriage in the DFL-controlled House. But Rep. Mike Benson, R-Rochester, said he was disappointed the governor decided to bring up such a divisive social issue.

"We have a lot of things on our plate, and for him to make a special point means it is important to him and that he will pursue legislation this year to get it done," he said.

The governor also called on lawmakers to take steps to encourage the development of renewable energy such as wind and solar to help battle climate change. He highlighted the work of famed polar explorer Will Steger, who had a front-row gallery seat for the governor's speech.

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"Our state and our nation are still not doing enough to reverse this path toward global catastrophe before it is too late," Dayton said.

The governor also called on Minnesota businesses to adopt an after-school program to keep young people off the streets and in a positive, safe environment. He also highlighted his proposal to fund optional all-day kindergarten and expand health care coverage to an additional 145,000 low-income Minnesotans.

While Assistant Senate Minority Leader Carla Nelson said she was thrilled that the governor chose to highlight Mayo Clinic's expansion proposal, she also said she has concerns about his tax plan.

"Minnesotans need to be aware that his tax proposal is going to make everyone pay more," she said. "And I think it's disingenuous to say he is going to make the rich pay their fair share, and he seems to do it by taxing everybody with the most regressive tax there is, which is the sales tax."

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