This year’s legislature has one main goal: to create Minnesota’s budget for the 2012-2013 period, which begins July 1 of this year. The first step in that process begins with the Governor’s initial budget proposal, which then will be compared to the alternate budget plans presented by the House and Senate.
This week, Governor Mark Dayton began that process and released his budget proposal. It’s a good starting point. While there are items in the bill that I will agree with and not agree with, I am very supportive of the budget’s overall direction. This year, Minnesota’s governor has created a budget that protects working families from tax increases and addresses ongoing budget deficits that have plagued our state for the past decade.
After the Governor’s budget was released, many lawmakers spoke out against the proposed tax increases. This budget process is not a debate about whether to raise taxes or not to raise taxes. It’s a conversation about which taxes will be raised.
Republicans who claim they have produced an all-cuts approach to solve the $6.2 billion budget deficit are being dishonest. Their first budget plan, which I voted against and the Governor vetoed last week, would have raised $322 million of property taxes. Governor Pawlenty’s budgets since 2003 have raised property taxes more than $3 billion, from under $4 billion when he took office to over $7 billion statewide today.
The property tax is an unfair, regressive way to raise money. Primarily, they are not based on a person’s ability to pay. Someone with the exact same job and the exact same income could be asked to pay hundreds of dollars in additional property taxes from one year to the next, whether they can afford it or not. That same person with the same job and the same income knows they will pay about the same amount of income tax from year to year because that tax is based on a person’s ability to pay.
Under Governor Dayton’s plan, 95 percent of Minnesota taxpayers wouldn’t pay any more in income taxes or property taxes. Only those Minnesotans earning more than $200,000 a year or owning a home valued over $1 million would see increased tax liability. According to the Minnesota Tax Incidence Study, the wealthiest 10 percent of Minnesotans pay about 3 percent less of their income in state and local taxes each year than do the rest of taxpayers. Governor Dayton’s budget simply means the richest 5 percent of Minnesotans will contribute the same amount of income to Minnesota taxes as the other 90 percent of working families have been paying.
Governor Dayton’s budget approach finally takes the burden off homeowners, businesses and others who have been absorbing the state’s budget problems for far too long. In addition, it makes important state spending reductions, implements government reforms, and adds a stable revenue source to support our state’s financial health in the future. No longer will we be struggling with multi-billion dollar budget deficits every-other year.
As I said, this budget is a starting point, and lawmakers expect to have many conversations about the pros and cons of this proposal in the coming weeks. In the end, I am very hopeful we can retain the intent of this plan – to protect property tax payers and Minnesota’s middle-class, and create a state that supports new jobs and economic growth in the future.