Rep. Mark Anderson
At some point, you would think our string of economic reports showing surplus revenue in Minnesota would serve as a wet blanket on proposals to increase taxes.
How long can Gov. Mark Dayton and the new Democrat majorities continue clamoring for tax increases on all Minnesotans when it is becoming more and more clear they are unnecessary? The new economic forecast from Minnesota Management and Budget is the fourth consecutive report to show more revenue than previously projected, for a combined $2.8 billion dating back to November of 2011.
A $295 million positive balance is projected for fiscal year 2012-13. We also have significantly reduced the projected shortfall for 2014-15, from $1.1 billion down to $627 million. Most of the surplus – $290 million – will be used to repay delayed K-12 funding. The 2011 shift already has been fully repaid, but debt still exists from budgets enacted under the previous Democrat majority and Gov. Tim Pawlenty.
State revenue is projected to grow by 3 percent in the upcoming biennium. All we need to do to balance our bottom line is to craft a budget which stays within the comfortable limits of 3-percent growth. We can resolve our budget without raising taxes.
The problem is Dayton wants to increase spending by 7.6 percent and raise taxes by $3.7 billion to pay for it. Democrats in the House and Senate have not issued their budget proposals, but already are introducing plans to increase our taxes. Maybe the most over-the-top proposal would raise taxes on some liquor by 1,000 percent. The tax on a gallon of wine would increase from $3 to $30, for example.
Democrats wrapped last fall’s campaign around a plan to make the “rich” pay their “fair share.” While “rich” and “fair share” are subjective, it is plain this has become a bait-and-switch tactic. Tax increases being pushed by Dayton and fellow Democrats would impact us all, something a number of people expressed during widely attended town hall meetings I recently hosted in the district.
Consumers are bracing against expanding sales taxes to services like hair cuts, oil changes and some clothing. Small-business owners are suffering from anxiety over the governor’s plan to tax business-to-business transactions, which state officials estimate would cost shop owners $1.5 billion in 2015 alone. Newspapers from all four corners of the state have resoundingly criticized these tax plans.
Local governments also are concerned about the governor’s tax increases. The city of Faribault indicates the governor’s plan would cost it more than $50,000 in additional sales tax. We know who ultimately would pay that tab: We, the taxpayers.
Our economy is indeed growing and we are slowly recovering from the Great Recession. But we also are still at a precarious point and adding to the tax burden we face would threaten our resurgence. Most of us already lost 2 percent of our income when the federal government allowed income taxes to increase. The cost of gasoline is sky high right now. New taxes would undoubtedly cause some businesses to go under. Consumers almost certainly could expect to pay more for goods and services from the businesses that are able to stay in operation.
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Rep. Anderson can be contacted by email at rep.mark.anderson@house.mn or by phone at 651-296-4293. To receive email updates sign-up on his webpage at www.house.mn/9a.