Sales tax rate would drop to 5.5 percent, from 6.875 percent, but the state would start collecting taxes on more items like high-end clothes, online purchases and many services.
Key aspects of the two-year budget proposed Tuesday by Gov. Mark Dayton:
—An overhaul of the state's tax system would generate $2.1 billion in revenue, half of which would pay down the state's deficit.
—Would impose additional 2 percent income tax on about 53,000 of the wealthiest taxpayers; reduce property taxes and the corporate tax rate for businesses; and give homeowners a property tax rebate of up to $500.
—Sales tax rate would drop to 5.5 percent, from 6.875 percent, but the state would start collecting taxes on more items like high-end clothes, online purchases and many services.
—Increases cigarette tax to $2.17 per pack, from $1.23, and also raises the tax on cigars and smokeless tobacco.
—Almost $600 million in new education funding, boosting spending per student in public schools, doling out more in scholarships and expanding access to all-day kindergarten.
—Delays repaying schools for cost shifts used to balance previous budgets until fiscal year 2017.
—Would expand state Medical Assistance program to cover 47,000 more children and pregnant women. The expansion is done in part by shifting people from other programs and by boosting the income levels that determine who qualifies.
—Would hike sales tax a quarter-cent in seven-county metro area to help fund Southwest light rail line from Eden Prairie to Minneapolis, and to expand bus service around the Twin Cities.
—Would expand access to Minnesota GI bill to give veterans better access to education and job training.