Senate DFL offers budget plan

ST. PAUL (AP) -- Gov. Tim Pawlenty cleared his schedule Tuesday to fly around the state, trying to promote his own budget plan and squash enthusiasm for a Senate DFL plan offered a day earlier.

"My message to the DFL Party is enough already. Stop!" Pawlenty said. "We have enough taxes in Minnesota. We have too many taxes in Minnesota and the taxes are too high. Enough already, we need to draw the line."

Pawlenty signed a campaign pledge to oppose any state tax increases and has stood by it, despite criticism that his proposal cuts some programs too deep.

Senate Democrats on Monday proposed about $1 billion in tax increases from tripling the cigarette tax and charging higher income taxes on the top 5 percent of wage earners.

The taxes would solve a quarter of the projected $4.23 billion deficit and dull some of the cuts Pawlenty proposed to colleges, senior citizen and low-income health programs, local government aid and agriculture. The Democratic plan also sends more money than Republican alternatives to K-12 schools and public safety.

"Governor Pawlenty just doesn't get it. His budget costs real Minnesotans," said Senate Majority Leader John Hottinger, DFL-St. Peter. "It focuses too much of the budget fix on seniors who built this great state, on children who seek the opportunity to succeed, on those Minnesotans who face disabilities and live from paycheck to paycheck."

Pawlenty ridiculed the Democratic plan, entering a news conference to the Beatles' "Tax Man," and House Speaker Steve Sviggum, a fellow Republican, said it would never pass the House.

The plan creates a fourth income tax bracket for families who earn more than $250,000 a year or $135,000 for individuals. The rate would rise from 7.85 percent to 9.4 percent for all income above those thresholds. The proposed upper rate would be second only to Montana, according to the Washington-based Federation of Tax Administrators.

Adding $1 to the current 48-cent-per-pack cigarette tax would push the state's tax from 30th in the country to fifth, according to the Minnesota Smoke-Free Coalition. Nationally, the per-pack average is 68 cents.

The proposal also would generate $160 million by ending some corporate tax exemptions, such as revoking their ability to deduct dividends they get from other corporations.

The tobacco tax increase accounts for the largest share of the Democrats' plan for higher revenues, at about $571 million. The income tax hike would net an estimated $421 million.

Hottinger described the plan during a multimedia presentation that included some of the 10,000 citizen voices he said DFL legislators heard at more than 150 town meetings.

"We've heard some who supported the budget of Governor Pawlenty," Hottinger said. "But we heard many others who feel the Pawlenty plan harms our quality of life, increases property taxes too much, impairs our economic future and falls far short of a shared response facing us."

Democrats contend the Republican plans rely on new revenue, too. They point to hundreds of millions of dollars in proposed state fees and argue that local officials will be under pressure to raise property taxes to deal with lost aid.

"This is a debate about which taxes," said Sen. Ann Rest, DFL-New Hope.