Gov. Dayton column: Surplus shows good times for state of Minnesota

The latest state budget forecast is great news for Minnesota. For the first time in seven years, the forecast is predicting budget surpluses for our state's current biennium and the next one. When I took office three years ago, the 2011 forecast ...

The latest state budget forecast is great news for Minnesota. For the first time in seven years, the forecast is predicting budget surpluses for our state’s current biennium and the next one. When I took office three years ago, the 2011 forecast predicted a deficit of $5 billion for the next two years. This year’s forecast predicts a surplus of $2.6 billion.

Some politicians will argue over who deserves what credit for these exceptional improvements. I believe the credit belongs principally to the people of Minnesota, to our businessmen and businesswomen who have added more than 133,000 jobs during the past three years, to their hard-working, productive employees who made those new investments successful, and to the teachers, health care providers, law enforcement personnel, and state and local government employees who make Minnesota such a great place in which to live, work, and raise a family.

Actions at the State Capitol also have aided our state’s economic recovery. We balanced the state budget even while repaying all of the $2.8 billion borrowed from our schools. We raised state income taxes on only our very wealthiest citizens, the top 2 percent. We used part of that revenue to provide property-tax relief, which has halted a decade of drastic increases. We invested most of the rest in better education. Early childhood education, all-day kindergarten, per-pupil aid increases, tuition freezes at Minnesota State Colleges and Universities and University of Minnesota campuses all will contribute to a better Minnesota for decades to come.

We also invested in more jobs and better jobs. Three state bonding bills during the past three years took advantage of low interest rates to fund hundreds of construction projects, which are improving college campuses, state parks, bridges, and highways while providing jobs for unemployed workers. Additionally, we made smart public investments that have encouraged major business expansions by 3M, the Mayo Clinic, AGCO, Magnetation, Shutterfly, and many others, which are creating thousands of new jobs. They are some of the reasons why the Gallup Job Creation Index ranked Minnesota the fifth-best state for job creation in 2013.

We have shown there is an important role for government in our state’s economic progress. Now we can help create more progress by wisely allocating this biennium’s $1.2 billion surplus. My top priorities are tax cuts for middle-income Minnesotans and businesses, increasing the state’s budgeted reserve, and essential expenditures.


I propose to use half of the projected surplus, or $616 million, for middle-income and business tax cuts. I would put the other half into the budget reserve with the understanding that none of it could be spent this year, except for critical needs like the recent emergency propane purchases.

My top priority is to give a big part of the surplus back to Minnesotans by cutting taxes. I want to give $301 million worth of tax cuts to single and married taxpayers by matching our state tax code to the federal code. For example, I would eliminate the state’s marriage penalty (an average tax savings of $115 per couple), extend the working family credit to more families, increase the child care tax credit, and eliminate the tax penalties on people losing their homes to foreclosures.

I also want to save many businesses about $232 million in taxes by repealing the three “business-to-business” sales taxes added last year. It is essential the Legislature pass a bill with these middle-class tax cuts and business tax repeals very soon, so Minnesotans can benefit from them in this tax season.

I am pleased with our state’s progress but definitely not satisfied. Too many Minnesotans have not felt benefits of this economic recovery. More than 137,000 people are still unemployed. Others can find only part-time work or are stuck in jobs they don’t want. At the same time, there are thousands of job vacancies throughout our state where employers are unable to find workers with the skills they need.

We need to do a better job of preparing young people and retraining older workers for the good-paying jobs of the future. Now more than ever the amount and quality of someone’s education and training will determine the person’s job, income, and other opportunities.

Minnesota’s main competitive advantages over other states and countries have always been the talents of our citizens and the quality of their educations. That is why our investments in better education are crucial to a better Minnesota.

Mark Dayton is the governor of Minnesota.

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