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Highlights of Gov. Pawlenty's budget proposal
Some highlights of Gov. Pawlenty's 2006-07 budget.

St. Paul, Minn. —

EDUCATION

-About 40 cents of every state government dollar goes for early childhood and K-12 education programs.

-Pawlenty recommends putting an extra 2 percent onto the basic per-pupil education formula in each year. School districts that revamp their teacher pay model to base it more on performance would qualify for bonus funding.

-Academically challenged children from poor families could get help with private-school tuition through a new scholarship that Pawlenty proposed funding with tax-deductible corporate contributions.

-The University of Minnesota and the Minnesota State Colleges and Universities system would see a shared increase of 8.4 percent over current budget levels, which is about $215 million in all split roughly in half.

GAMBLING

-Pawlenty described Minnesota as one of the few states with a major casino presence where state government doesn't share in the proceeds.

-He proposed a new Twin Cities-area casino, built around a state-tribal partnership involving three northern Minnesota bands that are among the state's poorest Indians.

-A site has not yet been picked for the proposed casino, but Pawlenty says it will only be put in a community that wants it.

-Pawlenty would require an upfront $200 million licensing fee and a profit-sharing arrangement in later years. Some proceeds could go into an account that could fund sports stadiums and arts projects.

HEALTH CARE

-The governor would do away with the MinnesotaCare program for childless adults and stop coverage for parents who make more than 190 percent of the federal poverty level, or $35,800 for a family of four. The cuts wouldn't affect children, seniors or the disabled, he said.

-Those who don't qualify for MinnesotaCare anymore would become eligible for other state health programs if they "spend down" their incomes on medical bills to below the federal poverty level for adults without dependent children, and to less than 190 percent for parents.

-He promotes tax deductions - reaching back to 2004 - for Health Savings Accounts set up by individuals to pay for health care expenses.

-He seeks $14 million in savings on prescription drug purchases for state-subsidized health programs, including pharmacy contracts. He wants to get better prices for expensive injectible treatments for conditions, such as arthritis, and delay reimbursements of newly approved drugs for up to six months while the medications are reviewed for effectiveness.

TAXES

-Pawlenty wants people who lease cars to pay the full sales tax on the lease upfront, rather than spread it out over each month of the lease. The change would take hold in July and raise $42 million this budget period.

-Sales taxes on rental cars and liquor sales were scheduled to fall next January. He proposes keeping the same - 12.7 percent on short-term rentals and 9 percent on liquor. The change brings in $104 million the state wasn't anticipating for 2006-07.

-Out-of-state companies that want to sell goods to state government would have to agree to collect Minnesota sales taxes on goods they sell to other entities in the state. It's aimed at capturing sales taxes avoided through Internet and catalog purchases and would raise an expected $3.3 million between now and 2007 and $4.4 million each year after.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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