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MN2020 - Scott Honour: Pining for the Past
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Scott Honour: Pining for the Past

August 26, 2013 By Jeff Van Wychen, Fellow and Director of Tax Policy & Analysis

In the August 10 Saint Paul Pioneer Press commentary, conservative candidate Scott Honour presented his case as to why he should be the next governor of Minnesota. Today, we will examine Honour’s vision for Minnesota: a return to the glory days of the “no new state tax” era.

Honour’s goal is a Minnesota that is “no longer at the bottom in new business start-ups" and has the highest tax burden. Regarding Honour’s “high tax burden” claim, it should be noted that taxes in high income states like Minnesota are typically above the national average, for reasons described by the Minnesota Department of Revenue that have nothing to do with government profligacy. A better gauge of the relative size of government in the fifty states is total state and local government revenue as a percent of personal income; on this measure, Minnesota ranks 28th among the fifty states. Even after the tax increases in the 2013 budget, Minnesota should remain in the middle of the pack.

In regard to claims about Minnesota’s economy and business climate, the conservative position is schizophrenic. Legislative conservatives want to argue that Minnesota’s business climate is strong, so that they can take credit for the improvement in state revenue collections. (The link between right wing fiscal policy and improved state revenue projections was debunked in a July 15 Minnesota 2020 article and a July 31 Hindsight blog post.) Meanwhile, conservative gubernatorial candidates like Honour want to argue that the business climate is weak so that they can blame it on Governor Dayton and legislative progressives.

On this score, Honour is half correct. In general, Minnesota’s economic performance over the last decade has been lackluster. Where he is wrong is in blaming this outcome on Dayton and the progressives. For the eight of the last ten years, Governor Pawlenty successfully blocked nearly all state revenue increases; as a result, Minnesota was a national leader in terms of the decline in real per capita state and local government revenue. During the last two years (FY 2012 and FY 2013), Minnesota continued to operate under a conservative “no new tax” budget crafted during the 2011 special session, when Dayton yielded to right wing ultimatums in order to end a state government shutdown.

Conservative dominance of state finances over the last decade puts them in a poor position to complain about the current condition of Minnesota’s economy and business climate. We’ve done things their way for ten years and what do we have to show for it? Ten years of below average job growth, escalating property taxes, declining real median household income (both in an absolute sense and relative to the national average), rising class sizes, soaring tuition at public colleges and universities, recurring budget deficits, and increasing tax regressivity.

The budget for fiscal years 2014 and 2015 recently enacted by progressive state policymakers affords Minnesota the opportunity to reverse these negative trends by restoring state investments in education, public infrastructure, targeted property tax relief, affordable health care, affordable housing, job training, and economic development. We should give the new budget a chance to succeed before returning to the failed “no new tax” policies advocated by Scott Honour and other conservatives.
 

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