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Minnesota 2020 Journal: Staying the Same Means Falling Behind

September 28, 2012 By John R. Van Hecke, Executive Director & Fellow

In a representative democracy, every election is an opportunity to evaluate past policy achievement against present concerns and future opportunity. It’s the choice of status quo or change. This November 6 is no exception. While I’m reluctant to use a hoary cliché, this election could very well be the most important that Minnesota has ever faced.

Two documents inform my thinking. The first is an August 2012 activity report from the Minnesota Rural Education Association. The second is Minnesota’s current Price of Government report. Both tell stories that conservative public policy advocates would rather I not share. Taken together, they offer compelling answers to the election’s policy direction choice.

Recently, presidential candidate Mitt Romney created a controversy by implying 47% of Americans pay no taxes. That’s inaccurate. What he meant to say is that approximately 47% of Americans pay no federal income tax but that every American pays multiple forms of taxes. Romney’s isolation of that 47% figure communicated conservative obsession with income tax narrowly and progressive taxation more broadly.

I hope that this squall helps teach people about tax policy complexity. It’s not as simple as assuming that a few taxes cover all community, state and national service costs. Tax revenue is generated from a mix of property, income and consumption taxes.

Similarly, because we ask different levels of government to perform different services, assessing the overall cost of government is equally complicated. Consider snowplowing. All roads are plowed but not by a single agency. We do this because we generally like to keep service activity as close to local control as possible, decreasing the distance between constituents and service providers.

The Price of Government report is the Minnesota Management and Budget Office’s study of the total cost of all levels of government. It combines state, county, municipal and school district costs then divides that figure by statewide personal income. The result is a financial index for the cost of Minnesota’s public services.

Listening to conservative public policy activists for the past several decades, you’d think that the cost of government is out of control. It’s not. According to MMB’s Price of Government report, Minnesotans spent 15.5% of personal income on government services in 2010. Assuming current spending patterns in 2015, Minnesotans will spend 15%. And the high point of this index? It was 2006 when Minnesota spent 16.7% of every dollar earned on government services. In other words, government costs, despite conservative advocates’ insistence, don’t actually move very much.

The cost mixture can, however, change. We can see this in a Minnesota Rural Education Association blog post, reporting on Minnesota Department of Education School Finance Director Tom Melcher’s presentation to MREA members. Minnesota is spending less money on K12 education than it was 17 years ago.

This shouldn’t come as a surprise. Declining educational investment has been widely reported. Every Minnesotan understands, I believe, that we’re spending less now than we were spending in the past, adjusting for inflation. We also understand the link between rising property taxes and cuts in state educational funding. Melcher’s remarks, examining data drawn from MMB’s Price of Government report, illuminate this shift’s dark policy ramifications.

Expressed as a percentage of personal income, Minnesota’s educational spending has dropped by 17% over the past 17 years. In 1995, Minnesota school spending accounted for 5.03% of every dollar in personal revenue. By 2013, that percentage declined to 4.19. In his presentation, Melcher translated those figures into dollars, revealing a $2.1 billion spending decline. In other words, had Minnesota maintained 1994-1995 school year’s K12 educational investment percentage, Minnesota schools would have had $2.1 billion more to educate children.

Translate this number into broad public policy terms. Conservative public policy direction, anchored by loud, regular attacks on public schools and school teachers, has reduced public education spending by 17% as a percentage of total public revenue. School bashing has cost us $2.1 billion in lost funding opportunity.

A lot of people, stunned by this data, will simply stop there, believing that revelation is sufficient to drive policy change. It’s not. However enticing, don’t succumb to the temptation to be pointlessly upset; analysis must lead to action. Melcher’s presentation, drawn from MMB’s PoG report, compels two questions, both leading to a third.

First, are we happy with schooling’s outcomes under the present financial direction? Two, does current policy represent a desirable educational direction, meaning do we want to stick with it? These are blunt, hard questions. They’re also fair.

Considering both leads to a third question, the one that I hinted at in the beginning. Thinking about electoral choices, do we stay with the current state public policy direction or should we change? Doing nothing, as the data reveal, leads to an on-going decline as vanishing school funding slowly strangles Minnesota’s strong public schooling tradition. Altering that outcome requires a different policy direction, one that can’t be realized if things stay the same. This November, consider the consequences and act accordingly.

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  • Bernice Vetsch says:

    October 2, 2012 at 8:57 am

    I would add that the attacks on public schools and teachers are not just part of the movement to kill public education in favor of privately run charters (run on public money, of course), but part of the anti-union crusade that began in the 1980s and continues today.