Dayton would keep surplus spending to $162 million

ST. PAUL -- A $1.2 billion budget surplus does not mean massive new state spending.

Gov. Mark Dayton made that clear Thursday when he unveiled his plan for election-year budget changes: About half of the projected surplus would go to tax cuts, $162 million would be spent on what he called "essential" needs and the rest would go into the state budget reserve.

Lawmakers and Dayton last year approved a $39 billion, two-year budget and Thursday's announcement centered on how the governor would deal with the $1.2 billion surplus announced Friday. Legislators will draw up their own budget proposals and negotiate with the governor before the legislative session ends by May 19.

New spending Dayton suggests includes a boost for those who care for the elderly and disabled, and $20 million legislators already approved to increase heating aid, especially for those who cannot afford propane after big price spikes earlier this year. He also wants to add $3.5 million to the school lunch program to help students that cannot afford to buy meals.

The Democratic governor remains confined to home after hip surgery and released his budget tweaks in a conference call with reporters.

He said he wants to cap spending increases at $162 million so the state can put $455 million more in the budget reserve in case the economy goes sour. That would leave the reserve at $1.1 billion.

After his announcement, Dayton took hits from both sides: some criticized him for not recommending spending on their pet projects while Republicans were not happy with his suggestion to increase spending at all.

“Gov. Dayton is squandering the opportunity for real reform, using the surplus to adjust his 2013 tax increase and adding millions more in spending, even after his budget spent 10 percent more than the last two years,” Senate Minority Leader David Hann, R-Eden Prairie, said.

Dayton's biggest spending increase request is $64.3 million for people who serve the elderly and disabled.

There is widespread support for increasing worker pay, but soon after Dayton released his budget plan a key organization supporting the added pay was critical.

The Long-Term Care Imperative issued statement saying the Dayton plan "takes a good first step toward restoring the funding of long term care for older adults," but said the governor did not go far enough.

Dayton said he knows not everyone got what they wanted.

"Most of the agencies have had to restrain, if not cut, their operating expenses," Dayton said.

An example is the Department of Natural Resources. A February story in the West Central Tribune of Willmar reported the department has a $1.5 million shortfall in its parks account, forcing some jobs to remain empty.

Dayton said the DNR did not seek more parks money, and said that state agencies need to watch their spending.

"There are a lot of needs out there that I am not addressing," Dayton said. "There are people who are going to be unhappy with that."

A rural issue that Dayton lists as a priority also did not get extra money: statewide high-speed Internet.

"I wanted to see border-to-border cell phone and high-speed Internet coverage by the end of my first term," Dayton said. "We are going to fall short of that, but that still is my goal."

The governor said he did not put broadband funds in his Thursday budget plan because those who want to increase coverage and speed have asked for up to $100 million, but have not spelled out specific details about how the money would be used.

Glencoe Mayor Randy Wilson, president of the Coalition of Greater Minnesota Cities, was not happy that Dayton left out broadband.

"Given the importance of the issue and years of talk, it is perplexing that Gov. Dayton failed to dedicate a portion of the surplus to enhance broadband speed and accessibility across Minnesota," Wilson said.

Wilson also criticized Dayton for not recommending that the state increase aid it pays to cities.

Dayton proposed increasing Minnesota State Colleges and Universities system spending $17 million so it will not be forced to lay off faculty.

He also wants to up the University of Minnesota budget $5 million. While he and the Legislature cannot tell the university specifically how to spend the money, he said that he wants the money to go to the University of Minnesota Duluth.

"It is my intention of providing an additional $5 million ... so they will not have to lay off faculty there," Dayton said.

Also getting more money under Dayton's plan would be the Minnesota Sex Offender Program, which is under a federal court order to fund an expert review of its services. A federal judge could take over the program if the state does not change it from a program that looks more like a prison to something that treats offenders.

Dayton wants more than $30 million new money for the Corrections Department to keep staff as prison populations grow.