Governor Mark Dayton released his proposed 2012-2013 budget yesterday. He balances the $6.2 billion deficit with $4.129 billion in tax increases and $1.94 billion in spending reductions. To round out his solution, the Governor plucked $136 million from the State’s cash flow account.

The cornerstone of the Governor’s proposal is the addition of a new 4th tier income tax bracket with a 10.95% rate and a temporary 3% surtax on incomes over 500,000. These two proposals raise a total of $2.8 billion in new state revenue. The 4th tier for the personal income tax at 10.95 % begins at incomes of $150,000 for married joint filers and $85,000 for single filers.