Daytonomics off to terrible start

Yesterday, the office of Minnesota Management and Budget, aka MMB, reported that revenues fell short of expectations for the first quarter under the Democrat-passed budget for Fiscal Year 2014-15. Here’s Rep. Jennifer Loon’s response to the news:

“Governor Mark Dayton and Democrat majorities’ budget, effective July 1st, forces hardworking taxpayers to pay more when they can least afford it for excessive government spending. The simple fact is our state spending is far-outpacing our state’s economic growth. Today’s news is a departure from the positive trajectory state revenues have been on for the last two years,” said Rep. Loon.

 

Thursday’s announcement from MMB comes just ten days after the state closed the books on the Republican-passed budget for Fiscal Year 2012-13. According to MMB, the Republican-passed budget ending June 30, 2013 exceeded projections by more than $3 billion.

“Despite the positive results from the Republican-passed budget of the last two years, Democrats decided to take the state in the opposite direction this legislative session. Between Democrats’ damaging tax increases already in effect and the upcoming impact of Governor Dayton’s warehousing tax and health insurance exchange, the road to a healthier economy in Minnesota just got steeper.”

That wasn’t the only bad news for the Dayton administration. The Tax Foundation released its 2014 annual report. Here’s the key takeaway from their report:

The 10 lowest ranked, or worst, states in this year’s Index are:
41. Maryland
42. Connecticut
43. Wisconsin
44. North Carolina
45. Vermont
46. Rhode Island
47. Minnesota
48. California
49. New Jersey
50. New York

This is what report said:

Minnesota, by contrast, enacted a package of tax changes that reduce the state’s competitiveness, including a retroactive hike in the individual income tax rate. Since last year, they have dropped from 45th to 47th place.

Ben Golnik, the Chairman of the Minnesota Jobs Coalition, issued this statement on the Tax Foundation’s report:

“This new study is the latest evidence that Mark Dayton’s massive, job-killing tax increases are hurting Minnesota. It’s obvious that raising taxes by nearly $2 billion to cover a budget deficit one-third that size was excessive.”

The only reason Minnesota’s economy isn’t tanking is because of massive amounts of government spending. Put differently, taxpayers are artificially propping up Minnesota’s economy. Real economic growth isn’t possible when government punishes profitmakers, aka job creators.

The contrast between the budget that the GOP legislature passed and the budget that’s now in place couldn’t be more stark. The GOP budget generated enough revenue to fill Minnesota’s rainy day fund and pay off all but $238,000,000 of the school shift. The Dayton/DFL budget is already falling short of their revenue projections.

With Sen. Bakk already threatening to not repeal the warehousing services sales tax, the farm equipment repair sales tax and the telecommunications sales tax, Minnesota’s employers have less incentive for staying in Minnesota. Cargill has already moved two of its operations to other states. Red Wing Shoes is seriously considering moving its warehousing operation to Wisconsin. Other iconic Minnesota companies like DigiKey and Polaris are thinking of moving across the border.

As Rep. Loon said, the Democratic legislature chose to take Minnesota in a different direction. The early results of their change of direction are ominous. I’m not surprised.

Comments welcome at Let Freedom Ring.