Minnesota lawmakers have 15 days left in the legislative session to craft and adopt a budget that is expected to contain tax proposals affecting all residents of the state.
The state has seen budget deficits for the majority of the past decade, but both the Minnesota House of Representatives and Minnesota Senate have approved tax increase proposals.
Democrats in the House approved a nearly $2.6 billion plan that raises taxes on income, online purchases, sports memorabilia, cigarettes and alcohol. Meanwhile, the Senate plan would increase revenue by $1.9 billion through sales tax expansions and income tax hikes.
With just a few weeks remaining, leaders will now head into conference committee to craft the final budget from the two proposals -- but it may not be easy. Gov. Mark Dayton has voiced several critiques of both plans and there are large differences between the proposals.
At 9 p.m., FOX 9 News spoke with Tom Hanson, former commissioner of Minnesota Management and Budget, about what to keep an eye out for at the Capitol in the coming days.
Heidi Collins: While you were Commissioner your job was to consult governor Pawlenty and Lawmakers as they were being proposed and negotiated so you were highly involved in this process. Is it ever easy?
Tom Hanson: "No it's never easy. And in particular this year when there still is a six hundred million dollar plus deficit-It's always tough to come up with solutions that everybody likes."
Heidi Collins: "Is it inevitable though that at the end of this legislative session most if not all of Minnesotans will in fact be paying higher taxes and is that the only answer, I mean where do spending cuts come in? And this is a national debate too. Is there a way to freeze what we're spending right now which I believe is somewhere around thirty five billion and write the ship?"
Tom Hanson: "Well that's the big debate not just here in Minnesota but nationally. How do you solve the budget crisis' that are happening in Minnesota and federally? You can raise taxes like the majorities in the Minnesota Legislature are proposing and their proposing to use them for education and higher education funding. But there are also arguments by Republicans that revenue has increased from the last biennium to the current and that's enough to keep spending going. "
Heidi Collins: "In fact it is something like 550 million for education that the state is looking at..?"
Tom Hanson: "That's right, that's right...For kids in secondary and post-secondary as well as our colleges."
Heidi Collins: "And at the same time are we not looking at something like a 35% pay increase for lawmakers as well?"
Tom Hanson: "Yes, there are proposals to increase the Governor, constitutional officers in the executive branch as well as Senators and Legislators."
Heidi Collins: " Yeah I mean this has already passed the Senate a 35% increase."
Tom Hanson: "Yeah it's in the House and we will see whether that happens. It's always easier for the Senate in a year li9ke this to do unpopular things because they don't face the vote for four years. However the House and the Governor face the electorate next year in 2014 they're a little more reluctant to do very unpopular things."
Heidi Collins: "Right. Needless to say the math is very interesting. Quickly, who then should be paying more I mean last week at the Capitol Governor Dayton made it clear himself who he thinks should pay. Listen with me. .."
Governor Mark Dayton: " I don't believe we should be increasing taxes on Middle income Minnesotans I think they are overtaxed already especially compared to the very wealthiest."
Heidi Collins: "like we said won't nearly every level of income earner end up with new or higher taxes. It's something like a historic increase the highest in many years in this state..?"
Tom Hanson: "Right if you are a higher income or person or family you're likely to pay more in income tax. If you are middle to lower income you're less likely (depending on where they put the cut-off) but if you buy cigarettes and then alcohol then you may very well be paying more taxes as well. There likely will be a cigarette tax increase an alcohol tax increase is still up in the air. And then if the Senate has its way you'll be paying more for clothes, haircuts digital products, tattoo's, car repairs and a lot of other stuff."
Heidi Collins: "Alright well we will be obviously all of us watching these bills very closely to see which one of these bills goes all the way through."