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Dayton opens budget talks offering to chop his tax increase

Democratic Gov. Mark Dayton this morning told Republicans he would cut his tax increase plan in half, but said that is as far as he will go.

Republican legislative leaders left the meeting saying they never will agree to a tax increase.

In that case, Dayton told reporters, Republicans need to come up with other new revenue to balance the state budget.

"I will go halfway," Dayton said. "I won't go further."

A week remains before Minnesota legislators must adjourn. Dayton's announcement this morning was the biggest change since legislative arrived in St. Paul on Jan. 4.

While he wanted to raise taxes on the richest 5 percent of Minnesotans, Dayton's new plan would increase income taxes on the 1.9 percent richest, he said. He also dropped a proposal to raise property taxes on homes worth more than $1 million.

Dayton said he would agree to more state program cuts than he earlier wanted.

Republicans want to spend no more than $34 billion in the next two years, leaving the $1.8 billion in new revenue that Dayton wants as the major stumbling block. However, Dayton and Republicans also disagree with how money is spent and raised within 10 spending and tax bills.

Now, Dayton said, it is up to legislative Republicans to act. If budget negotiators cannot reach a deal by May 23, "it's their fault," the governor said.

The last of nine spending bills from the House and Senate are to be posted on line today, giving Dayton a full view of how Republicans would like to spend $34 billion.

House Speaker Kurt Zellers, R-Maple Grove, said he is not thinking about a special session, although most in the Capitol doubt the two sides can complete budget talks in the next week.

"Every time we meet we are making progress," Zellers said, although he and Senate Majority Leader Amy Koch, R-Buffalo, could point to no specific point where progress was made this morning.