The Free Press, Mankato, MN

St. Peter news

April 16, 2013

Progressive think tank defends "higher" taxes, spending

ST PETER — As lawmakers and Gov. Mark Dayton decide over the next month how much money Minnesota should spend in the next two years, there’s an ongoing argument about how much the state has spent in the last 10.

Conservatives and anti-tax groups point to the raw numbers: $26.6 billion for the two-year general fund budget in 2002-03, $35.4 billion for the current budget, $36.7 billion in the upcoming two years if Dayton’s proposed budget is adopted, and $38.5 billion if Dayton’s policies are continued for 2016-17.

Bottom line, the right-leaning groups say: a nearly $12 billion jump, a 45 percent rise in just 14 years.

Minnesota 2020, a progressive think tank that defends Minnesota’s tradition of higher taxes and higher spending, has released a new report suggesting those raw figures are seriously misleading.

Adjust for inflation and the ups and downs in state general fund spending caused by accounting shifts and federal stimulus funding in previous budget cycles and the numbers show a different picture: $40.6 billion in spending in 2002-03, $35.4 billion in the current budget, $35.7 billion in the upcoming budget if Dayton gets his way, and $37 billion in inflation-adjusted dollars for 2016-17.

Even if the governor, who wants to raise income taxes on the wealthiest 2 percent of Minnesotans to support higher spending, is able to enact his entire budget, less than a third of the real-dollar cuts of the past decade would be restored, said Jeff Van Wychen, director of tax policy for Minnesota 2020.

“These cuts are eroding Minnesota’s fiscal foundation and they need to be reversed,” said Van Wychen during a press conference in St. Peter, one of three held by the organization in southern Minnesota Tuesday.

Factor in Minnesota’s population growth — about 400,000 since 2002 — and it’s even more difficult to argue that Minnesota’s state spending is rising, he said.

Per capita state general fund spending in 2002-03 was $4,008 in inflation-adjusted dollars compared to $3,276 today, according to the report, which is available in its entirety at Under Dayton’s proposal, general fund spending would actually drop by $26 on a per capita basis (with another 93,000 Minnesotans projected to join the state’s population) in the upcoming two-year budget before rising to $3,313 in 2016-17.

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