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State Representative Paul Anderson
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4317
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GUEST COLUMN
Comparing our state with others
By Rep. Paul Anderson
Most of us are familiar with Minnesota’s financial woes. A last-minute deal balanced the budget for this year, but since most of the cuts were one-time fixes, the numbers for the coming two-year budget cycle look pretty bleak.
I thought it might be interesting to take a look and see what’s happening in other states, and see how we compare with other areas of the country. As Americans take time to think about this great land of ours as we celebrate its independence, we all need to be thankful to be living here. That’s not to say we don’t have challenges, but I think Minnesota, with its bounty of resources, its balanced economy, and a strong agricultural base, is poised to see a strong recovery when the national economy finally starts its rebound.
Here is what’s happening in other states, in terms of what they’ve done to increase revenue. California, which saw its budget increase by 31 percent in the five years from 2003 to 2007, has raised its personal income tax rates across the board by one-quarter percent. The sales tax was also increased by one full point to 8.25 percent. In some areas of the state, local add-ons have raised the effective sales tax rate above 10 percent.
Delaware raised its highest income tax rate by one percentage point to 6.95 percent on all those with incomes above $60,000. Cigarette taxes were also raised.
Hawaii and Oregon share the dubious honor of having the highest income tax rate in the country. Both recently raised their top rate to 11 percent, with Hawaii’s increase kicking in on incomes more than $200,000 and Oregon’s on incomes more than $250,000.
New York State again raised its income tax brackets, in addition to increasing fees on beer and wine. The highest income tax rate is now 8.97 percent on incomes more than $500,000. And because New York City imposes an additional local income tax, residents there pay a combined top-rate of 12.35 percent.
Our neighbor to the east, Wisconsin, has also raised its income and cigarette taxes. The top tax rate on incomes more than $225,000 is now 7.75 percent in the Badger State.
The states with the highest cigarette taxes are Rhode Island and Connecticut, where the tax per pack is $3.46 and an even $3.00, respectively. New Jersey is close behind at $2.70.
Amidst all the tax increases, several states actually lowered taxes in 2009. Another neighbor, North Dakota, reduced its personal income tax rate more than a half-point, down to 4.86 percent. Buoyed by revenue from oil and coal, North Dakota also reduced its property tax.
Going against the trend of its fellow eastern states, Vermont lowered its income tax rate one-tenth of a point, down to 9.4 percent. And Louisiana adjusted its tax brackets to provide tax relief to its residents.
(The above figures are taken from the book, RICH STATES, POOR STATES, published this year by the American Legislative Exchange Council).
According to figures from the Minnesota Dept. of Revenue, in 2006 (the latest year statistics were available) our state ranked sixth in overall taxes, on a per-capita basis. We also were sixth in income taxes, while ranking 13th in both corporate and sales taxes.
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Rep. Anderson encourages constituents to contact his office with input regarding any state legislative issue. He can be reached on the web at www.house.mn/13A and via email at rep.paul.anderson@house.mn. To contact Anderson by phone, call (651) 296-4317. Mail can be sent to Rep. Paul Anderson, 239 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, Minnesota 55155.
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