Email Update: Gov’s budget raises taxes, increases spending
State Representative Tom Hackbarth
Jan. 25, 2013
The budget proposal Gov. Mark Dayton issued this week is all about unnecessary spending to feed government growth and raising our taxes to pay for it.
We do not need to raise taxes to make ends meet if we spend responsibly. Revenue is continuing to rise even without tax increases due to the improvements Republicans made in 2011-12. Minnesota’s unemployment rate is 5.5 percent and shrinking. The budget Republicans enacted last biennium has produced a combined $2.5 billion in surplus revenue over the last three economic forecasts.
The responsible thing to do is to keep government spending to within that level. Instead, the governor is pushing additional spending and wants to raise our taxes to pay for it.
Indications are that trend is continuing and we anticipate 2 to 5 percent more revenue in the next biennium.
But, if the governor gets his way, we’ll soon be paying more for everything from a brake job to a haircut, a $100 coat, or to make an online purchase. Ever smoke? The governor’s proposal would jack up the cost of cigarettes by 94 cents per pack.
It all adds up to $3.7 billion more in taxes and $2.5 billion more in government spending.
The new top tax rate would rise two full percentage points, to 9.85 percent. State revenue officials indicate these new taxes would cost Minnesota’s business owners more than $1.5 billion. Wisconsin’s governor already has responded, indicating he would do more to encourage Minnesota businesses to relocate across the border.
The surplus revenue we have generated allowed us to not only fully repay the K-12 funding shift enacted as part of the 2011 budget compromise by Republicans, but to also pay off half the school shift enacted under previous Democrat majorities.
For as much as Democrats used repaying the K-12 shift as a chanting point against Republicans during the campaign, Dayton’s plan would not get around to paying that off until 2017. It’s interesting how the governor preaches that K-12 funding shifts are gimmicks and then includes one in his own budget proposal. I believe the surplus money being generated by Republican budgeting should be used to pay down the balance far sooner.
The governor made his budget plan public Tuesday. This was just days after most Minnesota workers received a 2-percent reduction in pay when the feds allowed our payroll taxes to rise. Additional tax increases that hit the middle class will be tough for folks to swallow.
In fact, the governor’s own fellow Democrats have spoken out against proposals like his. One Democrat in the House was quoted in their local paper saying, “We better not tax items that I would purchase.” Click here for the article.
The governor also says he wants to give all Minnesota property taxpayers a rebate through these tax increases. That means middle class-families and even our state’s poorest citizens will be paying more for everyday items so that even Minnesota’s richest homeowners can get a government check.
Dayton cannot pass his own budget bill, but this blueprint does show how he wants Democrats in the House and Senate to shape a budget this year: Spend more. Tax more.
I will continue reminding them why heading down this path is not only is unnecessary, but would be bad policy and a regrettable mistake.
Sincerely,
Tom