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Citing MN2020 Research, Governor Changes Course on Fees

January 28, 2009 By Jeff Van Wychen, Fellow and Director of Tax Policy & Analysis

At his budget release press conference, Governor Pawlenty proclaimed that his budget would increase state fees by only $2 million in the next biennium.

Referencing a recent Minnesota 2020 report on state fees, the Governor said "On the fee issue, one of the think tanks, Minnesota Project 2010 makes an issue of fees."  (The Governor could not quite force himself to say "Minnesota 2020," but we don't want to nit-pick with our newfound "ally.")  The Governor went on to acknowledge the large increase in the "health impact fee" that occurred earlier in his administration (described in detail in the Minnesota 2020 report) before emphasizing that the fee increases in his new budget will be minimal.

"I know that's of particular interest to Minnesota Project 2010," he concluded.  It certainly is, Governor!  We here at Minnesota 2020 (give or take a decade) are pleased that we were able to steer the Governor in the right direction and we celebrate our new-found influence with Pawlenty administration policy.

Unfortunately, on several other issues the Governor did not quite see things our way. For example:

  • Despite big talk of new money for K-12 education, per pupil state aid to Minnesota school districts is projected to fall by nearly two percent from the FY 2008-09 to FY 2010-11 under the Governor's budget after adjusting for inflation.  This is on top of the fourteen percent decline that occurred over the first six years of the Pawlenty administration.
  • Single adults making more than $10,400 a year would lose Medical Assistance eligibility under the Governor's budget.  However, there's plenty of money for corporate tax breaks.
  • The Governor slashes over a half billion dollars in property tax aids and credits, essentially balancing a sizable chunk of the state's budget problems on the backs of local governments and local property taxpayers.  During the first six years of the Pawlenty administration, local government revenues have already fallen more rapidly than state government revenue.

However, now is no time to be negative.  Perhaps the progress we've made on fees is the first crack in a mighty dam of obstruction.  Today fees, tomorrow the world! (or at least coherent public policy).

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