Dayton supplemental budget aims at health care, jobs

Gov. Mark Dayton on Monday morning offered a revised budget that raises revenue from business taxes to provide increased funding for several priorities.

Dayton’s $60 million supplemental budget increases spending for a jobs tax credit, expands the Veterans GI Bill and undoes previous cuts in Health and Human Services funding.

Human Services Commissioner Lucinda Jesson said a number of spending increases reverse cuts that were made in last year’s deal that solved a $5 billion budget shortfall. The increases include $5.9 million for personal care attendants, $6.4 million for medical education research assistance and $4.7 million for restoring coverage under Emergency Medical Assistance to chemotherapy and dialysis care.

“We can’t turn our backs on the need for further reform and continued budget vigilance. But we can address a few of those cuts that pose the most immediate harm to people and our health care infrastructure,” Jesson said.

Central among the jobs-related proposals are $35 million in tax credits to businesses who hire veterans, recent college graduates and the unemployed and $10 million for the Minnesota Investment Fund.

The February economic forecast projected a $323 million budget surplus, which is already spoken for in building up reserves and paying back the K-12 education shift that was used to solve last year’s budget deficit. Management and Budget Commissioner Jim Schowalter said the new spending is paid for with new revenue.

“This is a self-balancing package. It is balanced both in this biennium and in the next,” Schowalter said.

Dayton’s calling for two tax changes that would bring in $44 million in revenue for the current biennium. He would reduce the tax break for foreign operating corporations so that their current 80 percent deduction is reduced to 62 percent this year and down to 39 percent in the following year. He also establishes an affiliate nexus tax, which is also known as the Amazon tax, that would impose the state sales tax on online retailers who sell goods to Minnesotans through state-based affiliates.

With regard to the changes for FOCs, which was enacted by former Gov. Rudy Perpich, Dayton said the proposal “would bring that money back home and we’re going to invest it in the future of our state.”

There is $15.5 million in non-general fund money, the bulk of which is changes to environmental programs like hunting and fishing licenses and watercraft surcharges.

Dayton includes $515,000 for soft body armor vest for law enforcement. The current funding for the vests has been depleted. The requested funding for the vests comes shortly after he vetoed a gun-rights bill that was opposed by law enforcement groups. Rep. Debra Hilstrom, DFL-Brooklyn Center, a former Public Safety committee chair, praised Dayton’s alliance with law enforcement.

“From day one,” Hilstrom said. “Governor Dayton has shown his strong commitment to helping our police officers and improving public safety in our state, and today’s proposal continues that. Our officers should never be in a position where they can’t afford the equipment they need to be safe.”