Minn. GOP questions 'cuts' in Dayton budget

ST. PAUL, Minn. (AP) -- Minnesota Gov. Mark Dayton's administration said Monday that what was initially billed as $225 million in spending cuts in his budget blueprint is actually $58 million less.

A Minnesota Management and Budget spokesman said of the $225 million that was billed as "cuts" on material provided in Dayton's budget release last week, only $167 million is actual spending reductions. The rest are "reallocations" within state agencies to other programs.

The issue was first raised by GOP Rep. Denny McNamara during a hearing of the House Ways and Means Committee, which is charged with piecing together the legislative budget. It gathered Monday for its first detailed look at Dayton's $38 billion, two-year tax and spending proposal.

Dayton is seeking a lower state sales tax that applies to more purchases; an income tax increase on earnings above $150,000 for single filers or $250,000 joint; and a 94-cent increase in the state's $1.58-a-pack cigarette tax. The money raised would be spent on education, job creation programs and to provide $500-a-year property tax rebates for homeowners.

GOP committee members were wary of the tax increases, saying they would make it harder to do business in Minnesota. Several Democrats from Minneapolis suggested that the cigarette tax hike could be accompanied by a liquor tax hike, since both are aimed not just at raising revenue but also promoting healthier living.

McNamara, of Hastings, asked whether what was billed as $225 million in cuts in Dayton's proposal was actually both cuts and redirection of resources within agencies. McNamara questioned about $4 million in reductions to the Division of Lands and Minerals at the DNR, which state Budget Director Margaret Kelly said would be spent instead on forestry, parks and trails programs.

Jim Schowalter, Dayton's budget chief, clarified that the $225 million was "cuts and reallocations." An administration spokesman later provided the breakdown.