By Rep. Glenn Gruenhagen
A 6-percent increase in our state budget should be enough, but the governor is willing to force a special session and risk a state shutdown to keep pushing for tax increases and more spending.
The Legislature sent the governor a responsible budget package which limits spending to the $34 billion we expect the state to receive in revenue during the upcoming biennium. This allows us to fund the state’s priorities without raising taxes, acknowledging tough times during the worst economic downturn in 60 years.
Contrary to those who are misrepresenting our budget as a massive cut, this actually is $1.8 billion more than we currently are spending. But the governor wants to spend $2 billion more than we proposed so he vetoed our budget package. This sets the stage for a special legislative session and a state shutdown would result if a budget is not approved by the end of June.
To reiterate, we sent the governor a $34 billion budget. That is the highest in Minnesota history and, frankly, is about $3 billion more than I feel we should be spending. Have you personally received a 6-percent pay raise lately? I think most of us would jump at the chance.
But the governor is still committed to raising taxes on Minnesota’s highest earners and is perpetuating the myth that these citizens are not paying enough. In reality, the top 2 percent of wage earners currently pay over 41 percent of our state's income taxes according to the most recent Tax Incidence Study.
Other states have tried this “soak the rich” approach only to have it backfire. Maryland and Oregon each passed tax increases on top earners only to end up collecting far less revenue than anticipated. Both states lost approximately one-third of their high-income filers, who relocated to tax-friendly states like Florida. They didn’t necessarily move their entire business out of state, but relocated themselves enough days a year to meet tax-filing requirements.
The revenue gap created by that scenario would leave the rest of Minnesota’s taxpayers holding the bill for Dayton’s extra spending. What taxes would the governor want to raise next?
I remain optimistic we will find a solution in time to avert a state shutdown, but it is disappointing we are even having this conversation because we already sent the governor a balanced, responsible budget.
A sincere thank-you goes to the folks who sent the kind words of support during the session and also to those who have urged me to stay the course with our budget. I look forward to continued input as we prepare for a special session.