Massachusetts is Not Alone: Minnesotans Building Support for Public Structures

As we look at the status of the Massachusetts budget, it is easy to forget that we are not alone in making some very important decisions about our state and our communities.

Not only can we learn from the consequences of our own state's historic budget and revenue decisions, we can learn from other states working through the same issues!

Sunday's Minneapolis-St. Paul Star Tribune Op-Ed, "The case for paying higher taxes, happily," laid out a scenario that was all too familiar - a state facing a structural deficit, another round of budget cuts, and advocates calling for even more tax cuts for big businesses. The authors, though push back, calling for a more balanced look at the effect of tax cuts:

What's good for General Mills usually is good for Minnesota. And despite the state's gigantic revenue shortage, some proposals at the Capitol to give further tax cuts and credits to businesses deserve a serious look.

But the assumption that more tax cuts are the only way to strengthen the state's economy is just plain wrong. It misses the truth on the flip side: What's good for the public also is vital for business in the long run.

The letter lays out a list of the ways those tax dollars would get spent that benefit large and small businesses as they do individuals throughout the state:

• ...Courts and the rule of law are essential not just for public safety but also for conflict resolution and contract enforcement for businesses.
• Delays and deteriorating roads -- due to the state's fast-growing congestion and crumbling transportation infrastructure -- build higher costs into the prices of products produced or sold here.
• Our public schools are being forced, in effect, to loan money to state government. Students at Minnesota's two-year colleges pay the third-highest tuition and fees of all 50 states. And Minnesota faces a growing achievement gap between white and nonwhite, and between affluent and poor households. These trends represent an erosion of Minnesota's educational advantage, the bedrock of our economic success.

Finally, the letter clearly lays out reforms that could help Minnesota work towards a balanced, stable means of supporting those structures:

Cut more judiciously, vigorously pursue government redesign to improve efficiency, and raise taxes by as much as $1 billion a year.

...The first and best option should be to restore personal income tax rates closer to 1999 levels. Nationally, those fortunate to be at the top of the income ladder are enjoying a greater share of income and wealth than they've had in almost a century. Wealthy households actually pay a smaller proportion of their incomes in state and local taxes than any other income group.

Substantial increased revenues also could come from broadening the sales tax base, which currently exempts services and clothing, or by repealing other tax breaks. By taxing more-diverse items in the growing service economy, the overall rates could actually be lowered, and tax credits or thresholds could be employed to reduce any disproportionate impact on low-income consumers. Politically, it might help to adopt these changes in stages or as temporary rate increases.

The letter is relevant not only for its  compelling examples of well-run government increasing the profitiblity of local businesses and for its specific (and familiar) ways to raise additional revenues, but for its overall pragmatic look at what Minnesotans value in their state and how they intend to act on and support those needs!

[Original MN Op-Ed by Charlie Quimby and Dane Smith - Charlie Quimby is a former small-business owner and a communications fellow for Growth & Justice, a nonprofit research organization that advocates for greater economic equality. Dane Smith is president of the group.]