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Dayton says Minnesota OK, but needs his budget

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ST. PAUL -- Minnesota's financial picture is improving, Gov. Mark Dayton proclaimed in his Wednesday night State of the State address, but policies in the last decade have hampered progress.

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His solution? Approve the $38 billion two-year budget he proposed two weeks ago that includes more than $3 billion in higher taxes on the rich and a reworked sales tax.

"My proposals have already aroused considerable controversy," Dayton said. "Such debate is healthy in our democracy. The genius of our system of governance is that no one gets to have it all her or his way. Starting with the governor."

Dayton blamed tax cuts starting in the Jesse Ventura administration for slowing the state's growth, and called for lawmakers to enact his budget. Republicans oppose it and fellow Democrats gave Dayton only mild applause Wednesday night when he discussed his budget plan.

"In the decade after Minnesota's income tax reductions, our economy fared worse than the nation and most other states," Dayton said.

Even with the past tax decisions, the governor said that Minnesota is doing better than most neighboring states.

"Minnesota's job growth in 2012 was the 12th best among all 50 states and we outperformed three of our four neighbors," Dayton said during a 48-minute speech. "Iowa ranked 30th best; South Dakota was 44th."

He continued a rivalry with Republican Wisconsin Gov. Scott Walker, saying the Badger state "helped bring up the rear at 42nd."

Dayton added that only North Dakota led Minnesota in the region, with an oil-fueled job growth that led the country.

The first-term governor touched on what has become a major Minnesota and national issue, gun control, but said little more than there is a need to do "everything possible to stop the terrible acts of violence."

Dayton also urged businesses to sponsor after-school programs to keep youths busy at a time when teenage pregnancies occur and there is higher crime.

Another non-money matter he brought up was what he sees as a need to allow gays to marry.

"I want Minnesota to be a state which affirms that freedom for one means freedom for everyone, and where no one is told that it is illegal to marry the person you love," he said.

The governor praised the state's agriculture efforts, saying ag commodity exports rose 13 percent last year. He also singled out education achievements, touting higher math and reading scores.

Republicans found pieces of agreement with the governor, but Rep. Rod Hamilton, R-Mountain Lake, said the substance of Dayton's budget proposal still is missing.

"Where were the details?" Hamilton asked after the speech.

Republicans said they think Dayton's plan would end up costing families more.

"Gov. Dayton is asking every Minnesotan to pay more, and they're getting less from his proposed budget," said Senate Republican Leader David Hann, R-Eden Prairie.

The governor suggested next year be an "un-session" where lawmakers focus on streamlining government rules, and it was a proposal that found some common support between Republicans and Democrats.

"I think that streamlining the process is something we can agree on," Sen. Bill Weber, R-Luverne, said.

Dayton said previous state leaders have not acted on many Minnesota problems.

"We can choose, as others in our positions have before us, to ignore these growing problems, avoid fixing them and hope they don't crash down upon us while we're in office," Dayton said. "Or we can lead. That is what the people of Minnesota elected us to do."

The governor promoted his hope to raise taxes on the rich, charge sales taxes on services and some goods that have not been taxed and to lower the sales tax rate.

His budget plan would plug a $1.1 billion deficit, but the state still would owe schools that amount.

"My budget ... would lift us out of this miserable deficit-to-deficit cycle," he said.

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