Governor, DFL House & Senate Leaders Reach Tax Deal

By KBJR News 1

Governor, DFL House & Senate Leaders Reach Tax Deal

May 16, 2013 Updated May 16, 2013 at 11:11 PM CDT

St. Paul, MN (NNCNOW.com) - What Senate Majority Leader Tom Bakk (DFL-Cook) called the "lynch pin of the session" was reached Thursday.

Sen. Bakk, House Speaker Paul Thissen (DFL-Minneapolis) and Governor Mark Dayton announced they reached an agreement Thursday on a tax bill.

"I think it puts us in a very good place to complete our work on time on a budget that resolves our deficit, which was our number one job," said Rep. Thissen.

The deal provides $2 million in revenues over the next two years.

The agreement includes a two percent income tax hike on the state's top two percent earners. It also includes a $1.60 tax hike on a pack of cigarettes.

The tax plan drops the controversial alcohol tax proposed by the House. A surcharge to help pay back borrowed money from schools was also dropped.

"We are going to continue to accelerate repayment of the school shift by allocating excess revenue from the current biennium to pay that shift," Rep. Thissen said.

Throughout the session DFL legislative leaders stressed tax hikes are needed to resolve the state's $627 million deficit.

Tax Bill breakdown:
- 36% for education
- 31% for alleviate deficit
- 20% for prop tax relief
- 5% for jobs, housing

"We have to take care of the deficit. No games, no gimmicks, just honest accounting," Gov. Dayton said.

GOP leaders responded the tax hikes are not necessary.

"You don't need to raise two or three billion dollars to fix a $627 million dollar problem," said Senate Minority Leader David Hann.

"We have yet to see an actual bill and I think more than anything right now we have more questions than answers," said House Minority Leader Kurt Daudt.

The DFL deal sets the stage for the final few days of the legislative session, which is set to adjourn on May 20th.

Kevin Jacobsen
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