Better Minn. economic outlook eases budget stress 04 Mar 13

ST. PAUL, Minn. (AP) — Minnesota’s budget pressures have eased dramatically. But the political divide remains over how to shore up the state’s finances.

Budget officials Thursday slashed an earlier deficit projection by more than 40 percent. That leaves lawmakers with a more manageable $627 million shortfall as they set a budget over the next few months.

Republicans say the report validated their hold-the-line approach to spending while in power. Democrats who are now in charge maintain higher taxes are still needed to improve the economy.

House Speaker Paul Thissen says Governor Mark Dayton’s proposed tax hike on the top 2 percent of income earners remains likely.

Republican House Leader Kurt Daudt says his party’s refusal to increase state taxes over the prior two years worked and he warns against changing course now.