Last week, Governor Dayton unveiled his updated budget plan in response to February's budget forecast that shows a lower projected deficit of $627 million for the next two-year budget.

Despite projections of nearly $1 billion in new revenue reflecting modest economic growth, the governor's plan still calls for $1.8 billion in new taxes to support his overall spending of $37.9 billion for the next two years, a 7.8 percent increase.

The governor did pull from his plan $2.1 billion in controversial sales tax increases through an expansion of the tax to new goods and services, as well as a host of business-to-business services.

The governor's tax increase plan still counts on his original proposal to create a new 9.85 percent top tier in the income tax, a $0.94 per pack cigarette tax increase, a "snowbird" tax on part-year residents and a host of corporate tax increases.

Some of the spending supported by the sales tax increase was also pulled, notably the $1.4 billion in spending for the $500 homestead property tax rebate.

While the governor has backed off his plans for a sales tax increase, it appears to remain in play as the Senate Democrats begin weighing in with their budget plan.

When asked about the issue earlier in the week, Senate Majority Leader Tom Bakk didn't dismiss the possibility of keeping at least some business service sales taxes on the table.

Last week, Senate Democrats released their budget targets for the next biennium, which includes even more government spending than the governor proposed.

Senate Democrats have released an overall spending target of $38.2 billion. This is an increase of over $3 billion or 8.5 percent. More specific details will be released in the days ahead.

Local visits for this week

Thank you to everyone who came to visit last week: Fillmore County veterans, Lanesboro Parks and Recreation, National Alliance of Mental Illness, Winona Chamber members, Youth Day at the Capitol visitors and Minnesota Displaced Homemakers Association.

As always, you are key to helping me understand the issues that affect you. I welcome and encourage you to get in touch with me and share your input, comments and concerns at (651) 296-5649 or email