State of Shutdown: Governor Mark Dayton's Cigarette Tax Increase Shot Down

Just as it seemed like there would be no further room for compromise in state budget negotiations, Gov. Mark Dayton made two significant proposals Wednesday. He offered to increase the cigarette tax by $1 per pack or create a 2 percent income tax surcharge for the 7,700 Minnesotans who make more than $1 million annually.

But rather than move the talks forward toward ending the state government shutdown, Republican leaders told reporters assembled outside the governor’s office that “things went backwards today.”

Dayton met with GOP leadership Wednesday afternoon to try to break a budget impasse that has lasted six days and left nine legislative bills untouched. A $1.4 billion gap remains. Wednesday’s meeting broke after just 30 minutes.

Speaking to reporters after the meeting, Dayton said Republican leaders rejected all of his offers.

“If it was a step backwards, it was their step backwards,” he said. “I took a step forward. I offered two serious options.”

The GOP leadership and Dayton also discussed the option of using gambling revenue to narrow Minnesota’s $5 billion deficit but, according to Dayton, Republicans don’t have support within its caucus to pass a bill. Other options on the table include $300 million in annual health care surcharges and delayed payments for K-12 education.

No word was given on when the governor and GOP leaders would meet again.