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Senate Democrats stress education, filling state reserves in outline for next two-year budget

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ST. PAUL, Minnesota — Minnesota Senate Democrats produced a two-year budget outline Friday that would commit $555 million more for education programs and sock $250 million extra into state reserves, a framework that lands them between the ambitions of Gov. Mark Dayton and majority House Republicans..

The $42.7 billion, two-year plan from the Senate's majority party contains far less in tax relief than the House GOP has proposed and less in spending than Democratic Gov. Mark Dayton suggested. Senate Majority Leader Tom Bakk said it shows restraint with the state's $1.87 billion projected surplus in case the economy deteriorates.

There are "risks that are posed with a surplus because the appetites get pretty strong," Bakk said, adding, "You have to be careful that you don't overcommit."

The framework gives only a broad picture of where the Senate is headed, with granular details coming later. The goal is to hold votes on the Senate's full budget by May 1 to set up final negotiations with the House and governor ahead of the mandatory adjournment three weeks later.

Even with the new money that would be devoted to education, Bakk said it would be financially difficult to enact a public-college tuition freeze for all undergraduates or pay for preschool initiatives offering universal, no-cost access to quality programs for all 4-year-olds.

Senate Minority Leader David Hann, a Republican, issued a statement critical of the Democratic proposal.

"The state budget should reflect Minnesotans' values, but Senate Democrats clearly refuse to do the hard work Republicans are doing to eliminate wasteful spending," Hann said.

House Ways and Means Chairman Jim Knoblach, the top budget-writing Republican, attended the Senate news conference but left without offering reaction. A GOP blueprint released earlier in the week called for $2 billion in unspecified tax cuts, paid for in part by extracting more than $1 billion in savings from state health and welfare programs.

Bakk said Senate Democrats won't agree to a budget that guts MinnesotaCare, a subsidized but premium-based insurance program for the working poor. He noted efforts to dismantle it fueled a government shutdown in 2005.

Because the shape of the proposed GOP tax breaks isn't known, it's difficult to compare the competing budgets in overall size. Enacting only additional credits and exemptions — as opposed to cuts in tax rates — would count as spending under Minnesota budget practices. All told, House Republicans have proposed a maximum budget just shy of $42.6 billion.

Dayton's budget is closer to $43 billion for the two-year period that starts July 1. The Democratic governor said Thursday that it's hard to assess the other proposals because they lack the line-by-line details his administration developed.

"I can't critique something that's not defined," Dayton said.

Senate Democratic leaders said the money they hope to add to reserves would bring rainy-day accounts to about $1.6 billion, money that can be tapped if another deficit hits. But their plan also would undo some accounting shifts used for decades to push payments to local governments out in the future or require businesses to accelerate sales tax payments — fixes that would require hundreds of millions of dollars now.

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