MN's Dayton takes 2nd swing at state budget - KTTC Rochester, Austin, Mason City News, Weather and Sports

ST. PAUL, Minn. (AP) -- Gov. Mark Dayton Thursday outlined revisions to his state budget recommendations. He is reshaping his plan after improved economic news whittled a projected deficit to $627 million.

The Democratic governor has said he is scrapping plans to expand the state sales tax to services. He was counting on the new revenue to shave the underlying sales tax rate and provide property tax rebates. Those tax breaks, along with a recommended reduction on the corporate tax rate, are going away too.

Less was known about possible changes to spending on programs that make up the two-year, nearly $38 billion budget.

In his press conference Thursday, Dayton asked Minnesota's wealthiest citizens to pay more than a billion dollars in new income taxes in order to boost state funding for schools and colleges by nearly $900 million.

Dayton also jettisoned the $500 yearly property tax rebate, but puts additional money into an existing program that provides property tax rebates and beefs up a property tax credit for renters. He boosts state aid programs to city and county governments.

Dayton also continues to call for a tobacco tax increase and for eliminating tax loopholes that benefit corporations. He says it's not responsible budgeting to simply draw a line against all tax hikes.