As is usually the case during election cycles, national contests get most of the attention. For Minnesotans, however, the stakes for local and state races could not be higher. Family budgets are maxed out on property taxes and fees, and in anticipation of the upcoming legislative session, liberal state lawmakers are busy contemplating new taxes to close an estimated $1.1 billion deficit forecast for the next biennial budget.
The special interests would have you believe we are emerging from an era of “austerity,” thus new “revenues” are needed. But a closer look at the size of government in Minnesota reveals that we’ve yet to really kick our addiction to spending other people’s money.General-fund spending for the current biennium increased 13.7 percent from the previous one, and a 2014-15 budget of almost $37 billion represents a 31 percent increase in state spending over the last decade. Some austerity.
Oh, and the payback for a modicum of restraint shown in St. Paul a couple of sessions ago is Minnesota Statute 16A.152, which automatically spends any positive general balance at the close of the biennium in the name of replenishing school aid payments and local property tax buydowns. In other words, any surplus that might materialize is already spoken for.
The education lobby says it is owed the money from draconian budget shifts that shortchanged school budgets. What’s interesting is while the growth in state aid to schools has been relatively modest, total per-pupil spending (federal, state and local) has risen by 32.9 percent since 2003, according to the Department of Education. Moreover, the state share of tax revenue for K-12 was actually much lower in 2002 than it is now.
No, a lack of government revenue isn’t what plagues Minnesota. Recent history proves that. In 2006, voters bought a bill of goods known as the “Vote Yes” transportation amendment ostensibly aimed at dedicating the motor vehicle excise taxes for roads. By the time transit interests got done with it, 40 percent of its revenue was being siphoned off for things like the Central Corridor light-rail project.
The year 2008 saw not only a $6.6 billion multiyear license, gas and sales tax grab, but also passage of the Legacy Amendment, an $11 billion sales tax increase whose “legacy” has turned out to be little more than a massive slush fund for a secretive group of insiders known as the Lessard-Sams Outdoor Heritage Council.
Yet none of this was enough for Gov. Mark Dayton, who in 2011 proposed the mother of all tax hikes. Instead of the $34 billion budget that eventually was enacted for the 2012-13 biennium, Dayton insisted on a $37 billion budget — which included $3 billion in new taxes, along with the highest income tax rate in the country at nearly 14 percent.
The governor and his union-backed allies at Alliance For A Better Minnesota (you’ve seen the TV ads) said that “high” income earners in the state could easily afford to “pay a little more.” Problem was the new taxes were set to hit married couples with joint incomes of $150,000 as well as single filers earning $85,000. Donald Trump they’re not.
The point here is that past is prologue — so count on Democrats to be pushing hard for new taxes in next year’s legislative session. Just remember in their zeal to go after job creators, the big spenders have put Minnesota dead-last the Business Tax Index from the Small Business and Entrepreneurship Council.
The apologists will point to an unemployment rate lower than the national average, but that is surely due to government being the largest employer in the state — which translates into higher taxes and less disposable income. Indeed, the Tax Foundation still ranks Minnesota’s state and local tax burden as sixth-highest in the country. In fact, government at all levels in Minnesota collects more than $25 billion annually from taxpayers. That’s roughly $4,700 for every man, woman and child who live here.
Keep that in mind come Nov. 6.