We’re finally in the last part of the Legislature’s regular session. Apparently, we’re steaming towards the biennial stalemate otherwise known as the budget special session. Unlike other years, this isn’t just about budget numbers. This time, it’s about the direction of the state of Minnesota, both economically and politically. It’s about whether Minnesotans side with the DFL and financial unsustainability or with the MNGOP and financial stability.
The DFL, led by Gov. Walz, has picked historic tax increases (again) and unsustainable spending. If Walz and the DFL get their way, the state will spend $83,000,000,000 for all revenues spending this biennium, with $51,000,000,000 in general revenue spending. Special thanks go to Harold Hamilton and the Minnesota Watchdog for highlighting the fact that “As recently as 2001, the state spent $37 billion in that biennium. This biennium will see all funds spending of $83 billion.”
That’s far beyond ridiculous. That’s irresponsible in the extreme on the part of the DFL. Mr. Hamilton highlights this important fact:
Capital is Mobile – And it Will Flee.
When taxes are too high, taxpayers will flee to lower taxed jurisdictions. This is especially true for higher net worth taxpayers, who generally have the resources and sophistication to engage in careful tax planning. High tax states are falling into a fiscal death spiral as they raise taxes to cover more and more spending while at the same time fewer and fewer taxpayers remain to shoulder the burden.
Isn’t it interesting that Gov. Walz’s Department of Revenue did their tax incident report, which showed that the lowest income people will get hit hardest by Gov. Walz’s and the DFL’s $12,000,000,000 tax increase over the next 4 years? That’s just starting the bad news. Hamilton continues:
Every reputable organization that analyzes tax burdens ranks Minnesota among the least tax-friendly states in the nation. With respect to overall tax burden, Minnesota is in the top 5 of every reputable ranking, including being the dubious distinction of #1 overall in Kiplinger’s rankings.
No matter the metric, Minnesota punishes its taxpayers. Kiplinger’s also ranked Minnesota as the least friendly state in the nation for retiree income. For example, it’s one of the few states in the nation to tax Social Security income. Add to that high estate taxes, and retirees have little reason to live here, other than the magnificent weather. The North Star state also has a nasty reputation for punitive taxes on the working poor through high regressive taxes.
Just before 7 p.m., the Democrats and Republicans met with the Governor. The meeting lasted about an hour and a half. Two major budget sticking points concern Gov. Walz’s proposed 20-cent gas tax and the already in place 2% medical provider tax, which sets aside money for low-income Minnesotans for health care.
Gov. Walz said they made a budget offer last Wednesday, even cutting $400 million in spending and revenue over the next two years, but he says Republicans won’t meet them in the middle. The Governor is confident a compromise will happen soon, but he says his patience is being tested.
“It doesn’t matter if there’s a big story in southern Minnesota telling us that our transportation’s at a tipping point and every single county commissioner and city manager and civil engineer was interviewed for it and said, ‘Yeah, we got to do something or this can be catastrophic,’ and yet we’re still hearing no,” Gov. Walz said. “So yeah, my frustration level is growing.”
First, there’s virtually no support for the gas tax increase. I mean, less than 20% of Minnesotans support a gas tax increase. Further, we learned this week that revenue collection for April was almost $500,000,000 over expectations, meaning we’d have a surplus for this biennium of over $1,500,000,000. If you add into that the fact that there’s over $2,500,000,000 in Minnesota’s Rainy Day Fund, there’s really no reason for any tax increases.
It’s time for Gov. Walz and the DFL to fold their tent and return to Realityville. God only knows where they’re at right now. I’m betting the DFL is inhabiting another solar system.