Dayton had started with a $37 billion budget proposal. Republicans held out for an all-cuts budget of $34 billion. Dayton proposed $35.8 billion, with a tax increase on the top 2% of earners. Republicans held out for a an all-cuts budget of $34 billion. Dayton cut his tax increase back to the top 0.3% of earners. Republicans held out for an all-cuts budget of $34 billion, and demanded concessions on abortion and stem cells.
Now, Dayton has offered still more compromise: a $1-per-pack cigarette tax increase. Dayton made clear that a cigarette tax is not what he wants, it's just an attempt to find some new source of revenue that Republicans might go for:
Dayton said he would prefer a temporary 2 percent surcharge on people earning more than $1 million per year, which he estimated would generate an estimated $520 million. In his telling, Pawlenty partly inspired his call for the cigarette tax option because his support of one helped end the 2005 shutdown.
“After the income tax, there aren’t any good taxes in my book,” Dayton said, insisting that $1.4 billion in additional revenue is needed to close the last of the state’s $5 billion deficit.
But, of course, even though a cigarette tax was good enough for Tim Pawlenty, today's Minnesota Republicans saw it as an outrage:
Republican leaders swiftly rejected the proposed tax increases. Speaker of the House Kurt Zellers called the offer “a disappointing step backward.”
“We’ve made it clear we do not need a tax increase to balance our budget,” he said. “I would say a tax increase in general is a non-starter.”
Meanwhile, as Republicans hold out for abject surrender to protect first the pocketbooks of millionaires and then of smokers, Minnesota is losing millions of dollars every day that it is shut down, and the state's parks have been vandalized.