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On final day, Legislature approves $38B budget, $2B in new taxes

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The Minnesota Legislature wrapped up its 2013 session late Monday night, approving the final pieces of a $38.3 billion state budget, which includes $2.1 billion in new tax increases.

The $38.3 billion budget marks an 8.8 percent increase over current spending, the Pioneer Press noted.

Lawmakers worked right up until the final moments before a midnight deadline for the session. The $2 billion in new revenue will be raised through an income tax increase on the highest-earning 2 percent of Minnesotans, a new tax that raises the cost of cigarettes by $1.60 per pack, as well as the scrapping of some corporate tax subsidies, MPR notes.

The new tax revenue, championed by DFL leaders in the DFL-controlled Legislature, would erase the state's forecasted $627 million deficit and create new money for public education and property tax relief.

The dramatic, last-minute vote on the tax bill came after Republicans for more than a decade had blocked statewide tax hikes, although many fees were raised during those years, the Star Tribune noted.

Republicans throughout the budget and tax debates criticized DFL lawmakers for promoting the tax hikes, killing jobs and over-reaching. They say new spending and higher taxes will slow the state's economic recovery.

"We are losing businesses in the state of Minnesota because of our tax code, and this (bill) will only make things worse," Sen. Julianne Ortman of Chanhassen, said, the Pioneer Press reported.

Lawmakers on Monday also gave final approval to a $156 million package of public construction projects. The bulk of that money, $109 million, is for renovation work on the crumbling 108-year-old state Capitol building. Money will also flow to flood-related projects, as well as to work on the Minneapolis Veterans Home, MPR reported.

Also on their final day, lawmakers approved a bill that would allow in-home child care providers and personal care assistants to unionize.

Among the measures that died in the final end-of-session negotiations was a proposed minimum wage hike. DFL leaders in the House and Senate could not agree on how much to increase the standard.

Another measure that was discussed but not approved: a lawmaker pay raise.

The Star Tribune has a tidy wrap-up of what the Legislature accomplished – and what did not get done – in the 2013 session.

Lawmakers in both parties had some final thoughts and parting shots. Star Tribune and MPR have reactions from both sides.

Just a few of the session's other highlights:

Vikings stadium funding - A plan to use tax revenue on new electronic pulltab gambling games in the state has fallen well short of expectations. So lawmakers plan to use a two-pronged approach to fill the gap for now: a one-time cigarette excise tax on current tobacco inventory, and the closing of what some consider a corporate tax “loophole,” MPR noted.

Gay marriage - The Legislature approved a gay marriage bill, and Dayton signed it. Same-sex marriage will be legal in the state effective Aug. 1.

Mayo's Destination Medical Center - Lawmakers approved $400 million in state money for Mayo Clinic's 20-year expansion plans. As part of the deal, the city of Rochester is expected to contribute $128 million toward the project, and Olmsted County is expected to pay $40 million. Mayo had asked for the money for infrastructure improvements in Rochester.

Education - Beginning in 2014, school districts will be able to offer all-day kindergarten free for parents and at state expense. In higher education, $250 million in new state spending will allow Minnesota state colleges and universities to freeze state tuition for two years.

Sales tax on clothing - Was not approved.

Gas tax - Was not approved.

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