Wednesday, February 16, 2011

Governor Dayton Releases His Budget Proposal

Contributed by Katherine Foley

Republican leaders in St. Paul are calling Governor Dayton's budget proposal a "job killer" (Pioneer Press, "Dayton's 5% Solution", available here:  Dayton's plan, which calls for an income tax increase for Minnesota's top 5% of earners, would solve half of Minnesota's budget crisis.  The increase would apply to married couples filing jointly who earn over $150,000, Head of Household filers who make over $130,000 and single filers making over $85,000.  

As for it being a "job killer", Dayton claims that the increase would only apply to 9% of businesses, one could speculate businesses that already benefit from federal tax breaks and outsourcing.  The claim is that companies will either leave Minnesota or will decline to make Minnesota their homes in the future.  

No body wants to pay more in taxes but a further reading of the article reveals several startling facts that Republicans are either not privy to or do not care about.  For example, in the past 8 years property tax rates have increased by 70%.  Higher income earners tend to favor property taxes because in the long run it is less money owed, but the elderly and families on fixed incomes cannot keep forking over more in property taxes to keep the police and fire fighters available to ensure their community's safety or to ensure that a community's children are receiving a competitive education.  

Furthermore, the article states that currently these top earners are actually paying less than the rest of Minnesotans.  The top 5% of earners enjoy a 9% tax rate while the bottom 90% pay 12.3% of their income in taxes.  If the argument is that the wealthy shouldn't pay more since they are creating jobs, this blogger would like to know: Where are these supposed jobs?  Minnesota lost 22,400 jobs in December and the unemployment rate continues to hover around 7%. (see If tax increases kill jobs why have we lost so many under Tim Pawlenty's reign? The truth is that the Republican argument just doesn't hold up. 

Dayton's budget doesn't only offer tax increases but also includes about $1 billion in budget cuts.  On the chopping block are cuts in MinnesotaCare that would drop 7,200 adults who are earning 200% above the poverty line, $44,000 for a family of four.  Meanwhile, elders in nursing homes or receiving home care would see a funding decrease and health care providers will see a surcharge increase in an attempt to "rein in rising health care costs."  During the campaign Dayton promised to increase funding for K-12 schools, which the state owes $1.9 billion in delayed payments.  His promise was kept, but the increase is less than 1%.  Dayton warned that if Republicans fail to get on board with new revenue sources the cuts will be even more painful for the most vulnerable Minnesotans than those he proposes.   

It is not fair that the vast majority of Minnesotans (who pay a higher tax rate anyway) face funding cuts which could potentially cause an even bigger drain on their already tight budgets.  It's true that some people abuse the social safety net, but Bernie Madoff and Tom Petters demonstrated that abuse happens at both ends of the spectrum.  Parents are fighting desperately to stay in their homes and feed their kids.  We expect schools (i.e. teachers) to be held accountable to the highest extreme with less money to work with.  The fact is that Republicans are not in this for the average Minnesotan.  Declaring that Dayton's budget "doesn't have much of a pulse" just shows how clueless they are to the suffering of many of Minnesotans.  With poverty on the rise and median household incomes on the decline, it's disgusting that Republicans are still favoring their wealthy campaign contributors (see  

I once saw a cartoon in The New Yorker that showed a lawyer sitting at his desk asking a potential client, "How much justice can you afford?"  (see image above). The cartoon could have just as easily have been a Republican sitting behind his desk asking a constituent "How much representation can you afford?"  It's a sad world when the majority can be out-represented by the wealthiest 5%.  

No comments:

Post a Comment