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Tax cuts and spending cuts highlight GOP state budget plan

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Republican leaders in the Minnesota House are proposing a two-year state budget plan that is vastly different from the one put forward in recent weeks by DFL Gov. Mark Dayton.

The $40 billion GOP plan calls for nearly $2 billion in tax cuts, although it doesn't specify exactly how those tax cuts would be distributed, according to the Star Tribune.

The tax cuts would pretty much use up the entire projected budget surplus of $1.9 billion. It would also cut spending in several areas, including environment, state government finance, and jobs and economic development, according to a Session Daily report.

“Minnesotans have to live by family budgets,” House Majority Leader Joyce Peppin, R-Rogers, said at a news conference Tuesday. “Government should have to do the same thing.” (Get all the numbers here)

By contrast, Gov. Dayton's budget would spend more money – $43 billion – and provide limited tax relief of about $200 million.

His budget calls for spending increases for K-12 education, higher education – enough to freeze tuition for another two years – and transportation, among other things.

One major area that Republicans would trim is the health and human services budget, where they call for spending of $11.6 billion in 2016-17. It's about $400 million more than the current budget, but $1.1 billion less than the expected need of $12.8 billion, according to Session Daily.

There aren't any details yet on where those cuts would come, but Rep. Jim Knoblach, R-St. Cloud, said one way to save money is to crack down on people who are illegally receiving state-subsidized health care coverage.

“We’re going to have a major initiative that saves hundreds of millions for the state by concentrating on Medical Assistance and of getting people off of Medical Assistance because they make too much money,” Knoblach said, according to MPR News.

At a news conference, House Minority Leader Paul Thissen, DFL-Mpls, said the Republican-proposed budget would mean “real cuts to people in a time of budget surpluses.”

“Cutting taxes for millionaires and the wealthy by cutting services for our most vulnerable should offend the sensibilities of every Minnesotan, and it will, because it’s the wrong priority and frankly, it’s simply mean spirited,” Thissen said, according to Session Daily.

One area where the GOP plan would increase spending is for nursing homes by $160 million, compared to a $25 million increase in Dayton's budget.

Democrats in the Minnesota Senate will release their broad budget outline later this week.

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