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DOUG JOHNSON HAS PROCLAIMED THROUGHOUT his campaign that his first move as governor would be a permanent, individual income-tax cut. Johnson may know the legislative ins and outs of the tax system better than any of his fellow candidates - since 1980 he has chaired the Senate Tax Committee. Critics snipe that Johnson never used that expertise for income-tax cuts until this year. But Johnson says the state budget surplus is now making a tax cut possible.
Johnson: I'm hearing from more and more Minnesotans, many who don't own a house, and are saying, "We go to work every day and we're three - third to fifth in the nation in individual income tax, and we'd like more take-home pay," so that's my top budget priority. To cut taxes before any other spending decision is made.According to Governing magazine, Minnesota has the seventh highest personal income tax in the country. Sales and property taxes are also above average, but not to the same extent. Johnson stresses his plan would reduce taxes in every income bracket.
Johnson: We have three tax rates in Minnesota, the 6 percent rate on the first portion of your income, then the 8 percent rate on the next portion, and the 8.5 percent rate in the higher categories. So my proposal would cut that 6 percent rate to 5-3/4 percent, an expenditure of about $600 million over two years.Johnson says the anticipated budget surplus would allow a tax break without cutting the state budget. He says he won't cut funding for education, crime control, transportation, and environmental programs.
Johnson: I feel comfortable that we can have a tax cut in the 1999 legislative session. And we're going to do some cutting, we're going to downsize state government, particularly top-level management positions. I want to de-centralize some of the agencies or part of the agencies. You know, everything doesn't have to be in St. Paul.Johnson can point to his efforts revamping the state's property tax system to bolster his image as a fiscal conservative. According to the group Citizens for Fiscal Responsibility, about $900 million in the 1998 tax bill was put into property tax rebates, as well as reducing tax rates for commercial and rental properties. Johnson says he's largely satisfied with those efforts, although some additional tweaking for homeowners could still take place.
Johnson: Market values on homes and seasonal recreation property are driving taxes pretty high on some of our homeowners, and I think we can help with that by putting a cap on the amount the assessed value can go up on a home, that'll really help, I think, thousands of homeowners in our state.And he says his proposal for increased state support of schools would mean an additional $400 million dollars in property-tax relief. Every gubernatorial candidate in every party is advocating some kind of tax cut this year. Johnson's plan is part of his middle-of-the-road campaign that blurs party distinctions. Johnson made a brief appearance at the state DFL convention, but did not seek the party's endorsement. Instead he has sought support from voters who live in rural areas, prefer smaller government, and wince every time they pay their income taxes.