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Dayton, legislative leaders reach agreement on budget

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Gov. Mark Dayton and DFL leaders in the House and Senate say they've agreed on the parameters of a two-year state budget, clearing the way for the Legislature to implement the plan before their May 20 deadline for adjournment.

The Star Tribune reports the deal increases state revenue by $2 billion and provides $400 million in property tax relief. Much of the additional money comes from raising income taxes paid by the highest-earning two percent of Minnesotans, and from a higher tax on tobacco.

A Senate plan to extend the sales tax to clothing was left out of the package.

The agreement leaves some specifics - such as whether to raise the alcohol tax - up to the conference committees that will be busy this week putting flesh on the bones of the budget deal. Forum News Service reports a gas tax hike and a pay raise for legislators are also among the issues to be worked out at the committee level.

Dayton, House Speaker Paul Thissen, and Senate Majority Leader Tom Bakk held closed-door meetings through the weekend before the agreement was announced Sunday afternoon. Fox 9 reports the trio touted their framework as "a fair and responsible budget".

The plan closes a $627 million deficit. Much of the additional revenue would be put toward education. As the Pioneer Press reports, it steers an additional $725 million to programs from pre-school through college. All-day kindergarten would be available to all Minnesota families beginning in 2014.

The agreement also calls for paying off the state's debt to its school districts over the next two years. The House had proposed doing that by imposing a four percent income tax surcharge on Minnesotans who earn $500,000 or more. MPR quotes Senate Majority Leader Bakk saying that, while there will be a surcharge, it will be considerably smaller.

The Pioneer Press reported Sunday morning that, even when the governor and both legislative leaders are in the same political party, it typically takes the pressure of a deadline to push them toward an agreement.

Lawmakers will need to pass a package of nine or ten bills involving taxes and state spending. Those bills will comprise Minnesota's budget for the two year period beginning July 1st.

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