ST. PAUL — Gov. Mark Dayton on Tuesday proposed using a $900 million budget surplus to expand existing tax credits for childcare and education costs, build out broadband Internet infrastructure into rural Minnesota and tackle longstanding racial economic disparities — all while socking extra funds away for a rainy day.

His proposal includes $1.7 million in Higher Education Asset Preservation and Renewal funding for Riverland Community College’s Austin campus. The funding is traditionally used to remodel, repair, and maintain current facilities so that they are safe, warm, and dry.

The Democratic governor’s supplemental budget proposal clocks in at nearly $700 million in new and expanded government programs. While the state’s good financial fortunes have given lawmakers a second chance at tweaking the state’s $42 billion budget, Dayton’s approach is also a nod to the signs of a slipping economy as evidenced by a shrinking budget surplus: He left $200 million unspent in case it takes a turn, adding to a cushion provided by a separate $1.6 billion budget reserve.

“That wasn’t done in the past, and we saw the catastrophic consequences of that,” he said. “I went through the nightmare of coming in here with a $6 billion projected deficit … in 2011. I don’t want to repeat that and I don’t want my successor or the people of Minnesota to repeat that.”

Dayton’s proposals set up nine weeks of wrangling with the Legislature, because Republicans who control the House said they’ll press the governor to offer up more for tax cuts and plan to tap the surplus for a transportation funding package.

The budget addresses several topics Dayton cited as top priorities during his State of the State address last week, such as using $100 million to better connect rural Minnesota with broadband Internet. Stressing the importance of aiding middle-class residents, the budget renews his previous calls to expand a child care tax credit to 92,000 families and to offer an estimated 18,000 families extra help for educational expenses. Another tax credit expansion would boost tax refunds to working families making less than $55,000.

Republicans are on board with putting more money into broadband grants — though they quibble on the total amount — but wanted more money to go toward tax relief.

Senate Minority Leader David Hann quickly dismissed Dayton’s priorities as “out of whack.” House Speaker Kurt Daudt said the state should devote more of the surplus to tax cuts rather than new spending, suggesting a tax credit for college tuition and exempting the Minnesota’s senior citizens from income taxes on Social Security earnings as good options.

Daudt said last month’s news that a projected budget surplus had dropped from $1.2 billion to $900 million was “a sign that we need to act now that we need to make our tax code more competitive.

“We need to put some money back in Minnesotans’ pockets,” he added.

Dayton made a big statement on tackling economic gaps for black and minority residents, outlining $100 million to better fund loan programs for minority- and women-owned businesses, initiatives that help low-income people buy their first home and job-training programs. He left $33 million unspecified for the Legislature to work out.

After getting rebuffed in last year’s push to offer preschool statewide, the governor went back to the drawing board. Tuesday’s proposal pitches a scaled-back version, requesting an initial $25 million to fund voluntary programs, specifically targeting poor school districts without other early education options.

While Dayton stressed that his wish list was flexible, he deemed some criminal justice and health care improvements “absolutely imperative.” Tens of millions of dollars would go toward Minnesota’s psychiatric hospital and mental health facilities, where employees have reported a string of violence at the hands of patients.

There’s also an olive branch to the federal judge who declared Minnesota’s controversial sex offender program unconstitutional. In tandem with separate proposals to build less-restrictive facilities, Dayton is recommending millions of dollars to perform regular evaluations of offenders for possible release — a key requirement from last summer’s court decision.