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Horner would mix cuts, tax increases

ST. PAUL -- Minnesota programs would be cut $2.45 billion and taxes increased $2.15 billion under governor candidate Tom Horner's budget plan.

Horner's proposal would lower the state sales tax by a penny a dollar, but he would start taxing clothing and personal services for an increase of $1.4 billion. He said he has not decided what services to tax, but earlier hinted that haircuts could be among them.

The Independence Party candidate said on Monday that he would continue to delay state payments to schools and create casinos at the state's two horse-racing tracks if he is elected.

Within days after the Nov. 2 election, he said, he would begin studying how to redesign aspects of state government, with an expected budget savings. And, he would freeze most state hiring on Jan. 1.

Horner claimed that his plan is the most specific of any of the three major governor candidates.

Democrat Mark Dayton relies in a large part on raising income and property taxes on the richest Minnesotans to balance a projected $6 billion deficit in the state's $30 billion, two-year budget. Republican Tom Emmer plans to release his budget plan in two or three weeks.

Horner said he and running mate Jim Mulder "felt it important to lay out a complete budget." However, during an hour-long meeting with reporters, Horner repeatedly said that his campaign does not have the capability to fill in all the details.

Highlights of the Horner plan include:

- Cut sales tax by a cent per $1, but include clothing and some services in the tax; food and medicine would not be taxed.

- Increase taxes $1.50 per pack on cigarettes and 10 cents a drink on alcohol.

- Gain $250 million via a racino for a budget reserve and natural disaster fund, as well as special projects such as a Vikings football stadium.

- Continue a $1.8 billion delay in state payments to schools.

- Reduce state aid to counties, but allow counties to establish a local sales tax of up to a half-cent per $1.

- Reduce state grants and other programs by $1.35 billion.

- Redesign state government for a $1.1 billion savings.

- Spend $360 million more on education, health and senior citizen programs.

- Borrow $400 million for road, education and other facility construction.

Horner criticized Emmer as depending too much on budget cuts.

"We cannot be a state that is just pulling back," Horner said.

Emmer Campaign Manager Cullen Sheehan said the Horner plan "preserves the status quo in government. ... It relies on tax increases, which will affect the middle and lower class."

Sheehan said that when the Emmer plan comes out in early September, "I think you will see the detail necessary for voters to make a sound decision come election day."

As for Dayton's tax-the-rich plan, Horner said he has not seen the details and it would raise taxes too much.

Dayton, however, said the tax plan shows "a fundamental difference" in the campaigns.

"Mr. Horner and Rep. Emmer both believe that Minnesota's millionaires and multi-millionaires should not pay a single dollar more in personal income taxes, and that everyone else in Minnesota should pay higher taxes instead," Dayton said.

Don Davis reports for Forum Communications Co.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.