Tax increases unnecessary with positive budget news
Minnesotans continue to receive more good news about our economy. State economists recently revealed the state has its fourth consecutive surplus, totaling $2.8 billion from November 2011 to February 2013. What’s more, nearly 61,000 new businesses were registered and 55,000 new jobs were created in the state last year.
With our budget on the mend and jobs on the rise, we must ask our Governor: Why raise taxes on the middle class and small businesses by $3.7 billion, more than at any time in state history?
In this article I hope to show that we don’t have a structural deficit over here at the Capitol; we have a structural spending problem that certainly doesn’t need to be enabled by tax increases.
In February 2011, the new Republican-led Legislature was handed a historic $5 billion deficit. We responsibly managed the situation at hand, crafting the budget in such way that ensured our government lived within its means—just like Minnesota families do every day.
The results? Our deficit was reversed, the private sector is slowly but surely recovering, and revenue coming into St. Paul has far exceeded government spending. These extra monies have gone to refill our reserve and cash flow accounts, to pay back the entirety of the 2011 school shift, and to repay over $1 billion of the DFL’s 2010 school shift.
The fiscal year ends June 30, meaning that the operating budget Republicans put in place back in 2011 will come to an end, and the new one drafted by Governor Dayton and my colleagues across the aisle will take effect for two full years.
Going forward into the next biennium (2014-15), the Legislature must balance a projected $627 million shortfall. We can easily manage this minute deficit in a $35 billion budget. It would merely require a 2-percent reduction in projected spending increases, and if legislators can’t make this small reduction across the entirety of the budget, they shouldn’t be here.
Instead of wisely remedying the problem at hand—for instance, by paying off the upcoming deficit with reserve funds, or allowing the natural growth of the economy to yield the necessary revenue—my more liberal friends want to amp up state spending from $35 billion to $38 billion.
This proposed spending increase comes after they have $1.2 billion more to work with than Republicans did in 2011. As I said earlier, we don’t have a structural deficit over here; we have a structural spending problem, especially in light of the fact that, if left untouched, the current operating budget would yield a $782 million positive balance for the 2016-17 budget cycle.
My fear is that these tax-and-spend increases, combined with even more regulations and laws, will ultimately choke off our economic recovery.
It is my hope that my colleagues across the aisle will craft a budget that is open to honest compromise. We need a budget that lives within its means and allows Minnesotans to keep more of their money and keep Minnesota's economy moving forward.