What’s the best way to close Minnesota’s budget deficit?

Republican legislators want to hold spending to current levels to address Minnesota’s fiscal problems; Democratic Gov. Mark Dayton wants to raise taxes on upper-income Minnesotans. Today’s Question: What’s the best way to close Minnesota’s budget deficit?

  • JMM

    I completely support Gov. Dayton and his budget. It’s not about “soaking the rich,” it’s about asking those who benefit most from our economy to step up and contribute to the common good.

  • Laura Ross

    Increase taxes, and get rid of many of the loopholes, including inheritance taxes. The rich keep their money; it is out of circulation and certainly not helping most people.

    Cutting programs for the middle class and especially the poor end up keeping people away from training to be more productive workers, from healthcare including mental health and Chemical Dependency services to lead “normal” lives, again, to be a contributing part of society. This ultimately helps bring up dependent people to become contributors, taxpayers.

    My partner and I will be among those whose taxes are raised significantly if Mark Dayton gets his way – and we fully, strongly support his efforts.

  • Sean Taylor

    Everyone needs to pay their fair tax share–the loopholes that allow the wealthy to pay less than the middle class in taxes need to be closed. And, after almost a decade of no tax increases, Minnesota’s tax rate is around 26th in the nation. Do we really want to be below average when it comes to education and human services? No one in the new majority in the Minnesota House or Senate talks about the common good? Why not?

  • Lou

    Increase taxes across the board and ask all Minnesotans to share in the sacrafice. The tax rates should not fluctuate every two years at the whim of the current makeup of the legislative bodies but rather remain relatively constant so the state can handle periods of prosperty and recession. If there is “wasteful spending” in the budget, It should be handled independently of the current budget situation.

  • Clark

    Cut spending, cut spending and then cut spending more. There has been one state that has continued to create jobs in the past 5 years, Texas. Not California, not Oregon or any other high tax state. Follow the leader not the laggards.

    Second, analysis of taxing the rich never comes close to achieving the estimated revenue. When Maryland passed the millionaires tax, they collected about 25% of what was estimated.

    The wealthy have options to relocate.

    People in Minnesota are nuts if you really believe being #1 in income tax rate is good public relations.

    As for you really far left socialists, go ahead and increase the marginal rate to 90% so I too can sit on the wagon with the other lazy slob democrats.

    You tax more, dayton will spend more, then he will need to tax more until we all receive the note from the MN department of revenue, “How much did you make, send it ALL in!!

  • JJ

    How about a flat tax with no loopholes or deductions everyone pays the same percentage. Cut the biggest budget items first. Stop killing small quality of life programs (state parks, etc.) Also stop CUTTING taxes. In Florida a 1.75 billion cut in education was followed by a 1.6 billion tax cut. now everyone is in trouble. Admit that government is necessary and pay for it. I am tired of “cut taxes the economy is bad, cut taxes the economy is good” If you have government just admit it.

    We have to decide what is the least government we can live with and compromise our way there and then pay for it.

  • Steve the Cynic

    Raise taxes. Spending has been cut more than enough already. And, because state government services benefit the poor and middle class more than the rich, state taxes don’t have to be progressive to be fair (unlike federal taxes), so expanding the sales tax to clothing and services is a good option.

    There’s a bit of irony in the current discussion that would be funny if it weren’t so serious. Tim Pawlenty is going around the country boasting about how spectacularly successful he was reducing government spending in Minnesota. Meanwhile, Republicans in the Minnesota legislature are, in effect, claiming that Pawlenty wasn’t nearly successful enough, and that there’s still more fat to be squeezed out. The truth appears to be irrelevant to these folks. Here’s the truth: Pawlenty didn’t shrink government as much as he claims; a large part of what he did was merely to defer the cost through payment shifts, to delay infrastructure work that only gets more expensive the longer it’s put off, and to push costs onto counties and cities. And many of the real cuts he implemented were mean-spirited attacks on the poorest and weakest among us, like getting rid of GAMC.

  • Jon

    one word answer to solve the MN deficit “Don’t.” (I know it’s technically a contraction.)

    Go into debt.

    Wait for a better economy to come out of debt.

    I do think a flat tax is a much better system then what we have, though that doesn’t answer the question… a flat tax should lead to relatively small changes in the amount of taxes collected. The government should store surpluses, and sit on the deficits, They should be the buffer for the economy that we don’t currently have… if Their spending remains relatively flat, and the taxes collected remain relatively flat, there shouldn’t be much of an issue with the budget any more, and we can all move on to more important things.

  • Greg

    How about some of BOTH: Cut spending AND raise taxes? If both sides dislike it and it solves the problem, it’s probably a good compromise.

  • Steve the Cynic

    Listen, Ebenezer Clark, those of us who want to raise taxes, contrary to the absurd caricature you seem to believe is reality, are not “lazy slobs” looking for handouts for ourselves. I, for one, do not wish to live in a place where poor children don’t have access to health care, where young people don’t receive a good education, where parks are non-existent or overgrown with weeds or overrun by gangs, where roads are in disrepair, etc. If you leave Minnesota for Texas, don’t let the door hit you on the backside on the way out.

  • Steve the Cynic

    “The government should store surpluses, and sit on the deficits, They should be the buffer for the economy that we don’t currently have.”

    Good idea, Jon! In fact, that’s what Minnesota was doing, with bipartisan support, in the ’70s, ’80s and ’90s, with good results, until some very short-sighted folks decided that the surplus was evidence that taxes were too high and should be given back. Are you old enough to remember the “Jesse checks”? That was the beginning of our downward slide into our current troubles.

  • Jim G

    The best solution for the budget deficit is Governor Dayton’s. It includes cuts in real dollars and additional revenue in the form of increased taxes on the the richest 5% of Minnesota tax payers. They can afford a tax increase because they’re paying less as a percentage of their income than the middle wage earners. The Republicans claim this will drive ” job creators out of state” ,but never site real studies to support their claim. They keep repeating the same lies over and over again.

  • Greg D’Roseville

    I agree with the sitting on holding excess tax collections and riding out downturn’s. I think it allows use of flatter tax system and lower rates. The curren tax system is rigged for an old style economy and the business-logic that every quarter is growth or cutting staff and expenses. Unfortunately – there is no “state going out of business”option. SouthDakota or Iowa won’t take over MN and it obligations. On the current budget issues – if the republican legislature can consider taking a little more out of state-employees (pension revamp and teacher no-strike) that it shoulld be able to pull in more revenue from the upper income brackets that numerous studies show have experienced substantially fewer problems over the last 2-3 years — -meaning the home ownership has not faltered and the ability to cover utilities-food-leisure-debts have not been signifgantly affected. If we are going to expect one side to pull – the other side better pull too.

  • raygor

    A state flat tax would be great. Make the first

    $20,000 exempt and tax the rest at the same rate. Expand the sales tax to clothes. Underwear and socks, clothes bought at

    non profit thrift shops should be exempted.

    To cut cost put recieving Medicad should go into managed care groups. Minnesota has

    a good reputation for cost control. Reduce

    the number of state employees as technology

    becomes better.(My wife is a state employee)

    Reduce the size of the legislature by 1/3 rd.

    With the internet and social media there is no

    excuse for not keeping in touch with ones

    constituency. Get rid of food per diem for

    legislators. No one pays for my meal daily.

    Get rid of corporate welfare. Yes, we need businesses to create jobs but I should not

    have to pay additional taxes so that business

    pays less. The idea that we should maintain

    a rainy day fund is excellent. The economy

    will always have ups and downs. Raise the gas tax so that there is a funding source for

    basic infrastructure and transit. Get rid of the

    check off for political contributions. Cut the salary of the legislature 3% since they are

    public employees and want the public employees to kick in 3% more for retirement.

    Everyone needs to share in the sacrifices that

    we are have before us.

  • Greg D’Roseville

    Dear occupants of Clark-topia —- read the papers, scan the blogs, check the web , call a Texas resident …. the cut, cut , cut , cut has not worked. State government and counties are unable to maintain infrstructure, schools or safety. The state budget is in 20% deficit. School rankings are falling. Infrastructure development and management investment is falling. You can start a company in Texas – and they’ll give you a tax holiday – but – the state can’t afford to build the entrace from the freeway for your companies trucks and you’ll have to builid your own sewer extension. Or the state can give you a pass on meeting state laws for pollution and you’ll be just fine. But – the residents are starting to find that .. that aint working out so well. a $10 dollar an hour job isn’t worth so much when you have to pay for all the damage it does to your body and family. Please re-think the bottom of the barrel you are heading for.

  • Kevin VC

    Do what Dayton said he would do, have the top 1-2 percent help out and join the rest of society. Enough with the Ivory Towers!!! We peasants are suffering for your caviar and french wine…

    Seriously, they have had enough tax breaks and growing. If all boats are suppose to float with a rising economy then evidently that does not hold true.

    Return the tax system to the way it use to be before Pawlenty and systems that worked.

    Rich people bailing out?

    Those who would leave due to increasing taxes are on too shaky a ground. Most wealthy people realize when a state starts increasing taxes the infrastructure is about to be improved and actually move in.

    So to those who would gripe and move out, better riddance.

    Let the real work begin.

    Tired of hearing from whiny rich people who really I have a REAL hard time believing they are starving on the streets like the rest of us.

  • Joe Schaedler

    The best way would be to raise taxes on top earners for a start, and only then should we start looking at line-items for budget cuts.

    Anti-tax ideology is cannibalizing our state and should be the first legacy issue to be thrown out the window.

  • uptownZombie

    a flat tax on all earnings, keep the first 30,000$ untaxed. I really don’t understand what the arguments are against simplifying our tax code by the use of a flat tax.

    Obviously you’ll run into issues with stocks and if people were able to buy them through work for cheaper than the market, but I’m sure that can be worked out with a “you can’t sell these for 3-4 years and after that it’s taxed at the flat rate”.

  • Matt

    Raise taxes on the rich and upper-middle class. Eliminate loopholes in business tax codes. Put new, higher and special taxes on more luxury items in the stores.

  • Alex Van Dyke

    The best way to address Minnesota’s current budget deficit is to cut programs that are not needed or are not achieving what they are actually supposed to be achieving and entitlement programs will have to be addressed and privatizing them might work.

  • Jake

    It would seem that our gov’t officials have no idea how to manage money and should have any spending ability pulled away from them. Seems to me when my checking account runs low on funds I have to cut back on what I spend…what is so difficult about this concept. This state can get by on much less…we have a lot of excess spending that can be cut. We also don’t have any need for wasted spending on stadiums and other embellishments.

  • Steve

    i support dayton and his policies and the basic way is collaborative effort to not necessarily cut programs but education needs a boost and more of a fair equitable tax system and ask not what the country can do for ask what you can do for the country. dayton i believe is bring mn back to the mircacle days!

  • Chris

    Raise taxes on the wealthy and invest in our University systems so we don’t have to worry about this short fall again. Basically the opposite of what the republicans want to do.

    Fact: the richest 400 people in the country have more wealth then the bottom 50%. That is just plain wrong!

  • Shane

    Let me make sure everybody understands this. To deal with the deficit all we would have to do is keep spending at CURRENT levels. You can’t call not getting a pay raise getting a pay cut. I say we actually CUT spending, then we don’t have to deal with this problem year after year.

  • Paul- St. Paul

    The budget will not be balanced by cutting spending cuts alone. Anybody who says they can balance the budget without also addressing revenues is not to be taken seriously. Governor Dayton’s plan to place a small additional tax the wealthiest Minnesotans is a start. A nickel or a dime a gallon on gas would add to the pot nicely as well.

  • Kevin

    The notion that the only way we can balance govenment deficits is to cut state and federal budget is pretty naive. The government entities are part of the economic engine of the US, to deny this is to not live in reality, we must look at raising the revenue side of the equation.

    Raise taxes on those most able to pay, continue consolidating government services across township, school district, cities, county and state, yes save money. Stop giving subsidy to the rich by decreasing taxes on the rich and corpoartions. Business makes deceions on where to locate based on many more factors than tax rates.

    Finally acknowledge that the most important job we do as a society is to educate those that come after us! Todate we have done a truly horrible job at educating the young people of the U.S.

  • Peter

    I think we need to look at several things. In the early 1980″s, when Gov. Quie was in office, they had a surtax for several years that helped address the situation. I think we could all help with that. Next we should have the top pay a little more of their fair share in taxes. The next would be addressing local goverment aid. This is a lot of money. If people want cuts, then drop it all. There will be many small communtites that will have to merge with other cities to survive. In the process there would be lots of layoffs, but big dollar savings. The county of New Zeland did this in 1989. They dismantled almost half of all goverment agencies and cities. Unemployement rose by several points, in the short run, but there were lots of savings in the process.

  • Elle

    Cutting or freezing spending takes necessities away from people with real daily needs that we ALL will suffer from in/for/with lack of fellow citizens.

    Conversely-

    Increasing taxes on the wealthy will take away a percentage of the abundance which certain individuals enjoy and will continue to enjoy and, as far as I can see, does not have a negative affect on the experience of the good life we all so very much want for ourselves and fellow human beings.

    Increase taxes as a framework for budget planning so that we with plenty can help see that all citizens thrive.

  • Steve the Cynic

    Shane, your idea of keeping spending at “current levels” would make sense if Pawlenty hadn’t “ballanced” the budget with accounting gimicks and postponing lots of necessary, inevitable spending. As it is, keeping spending flat woud in effect amount to a huge cut.

  • Gretchen

    I really feel that by only cutting spending, and specifically, making cuts to health and human services we are only hurting the low to middle class Minnesotans. Why should the richest not be affected by tough budget times? There should be a tax increase on the highest earners in Minnesota so that they too are affected. Too often we cut programs that help those who need it most, while there are those that feel they “need” ridiculous amounts of money each year.

    I also think that we really need to look at long-term ways to save money. An example would be to put more money into early intervention programs within the field of Early Childhood Education so that we could save money later in Special Ed programs. I think that all programs should be looked at to determine where consolidation can occur so that programs don’t overlap. But overall, I think that low to middle income families too often bear the burden of budget problems. We are already hurting enough and don’t need any more cuts to the help we receive.

    One last note, people should be a little nicer to one another, even if they have differing opinions on things. I am tired of looking at posts that are so insulting to people whose opinions differ. I think that the we need to work together more, try to at least understand the views of others, and stop name calling.

  • Matt

    I think spending cuts and revenue increases are equally parts of the solution. Tax rates are currently the lowest in decades, and the wealthy control an ever greater share of the country’s wealth.

  • Shane

    Steve the Cynic, as usual your post is long on talking points and short on details…

  • Lawrence

    The best way to close Minnesota’s budget deficit is to raise taxes on Minnesota’s upper income group and cut government services, primarily infrastructure projects. Truthfully, Tim Pawlenty has already cut human services and K-12 education during most of his 8 years in office, which a lot of people conveniently forget. Not only is it unfair to continue to cut from the same section of the budget, its irresponsible because if something catastrophic happens after you’ve completely cut human services and k-12 education, you don’t have any money left to solve the catastrophe. Hurricane Katrina and the Gulf Oil Spill taught us that – you set yourself up for costly disaster when you cut too many corners from the same slice of bread.

  • Neil

    For anyone who feels that we need more taxes or the euphemistic “increases in revenue” I have one, simple question:

    Where does it end?

  • Marcus

    Anything I say now would just be restating what has already been said. So, I will keep it simple: TAX THE RICH!

  • Matthew

    At the federal level, our current highest marginal tax rate is 35%. Prior to that, President Eisenhower’s highest marginal tax rate was 91%. Nixon’s was 77%. Ford’s was 70%. Reagan’s was 50%. Of course that means that only the dollars that exceed a designated amount are subject to that highest tax.

    At the state level, we currently “enjoy” the lowest taxes since 1991.

    With respect to the combination of federal, state, and local taxes, we currently “enjoy” the lowest tax burden since 1950.

    As a result of the current fiscal policies, we have a $14 trillion debt at the federal level and a $5 billion biennial deficit at the state level. And the debt we incur as a result of these fiscal policies makes us financially beholden to communist China and a handful of Middle East terrorist watch list countries.

    The new definition of “conservative.”

    Therefore, the answer to today’s question is simple: RAISE TAXES ON THE RICH!

  • Doubting Thomas

    One of the main reasons we keep having problems is because the state has no way to effectively save money. They tried creating a budget reserve account, but they don’t fund it beyond a token amount, and they spend it at the first hint of trouble.

    In years when we have a surplus, politicians spend every cent. This is true for republicans and democrats, they just spend it on different things. When you spend every cent you make, you have no choice but to cut spending or raise taxes when you inevitably suffer another deficit.

    If we’re serious about reform (which I doubt) we should pass a constitutional amendment requiring half of any actual (not forecast) surplus be deposited into the budget reserve account, and not let politicians spend it until they get a 75% percent majority to agree.

    Either that, or repeal the business cycle.

  • Phillip James

    Raise revenue and continue to effectively

    manage state government.

    1) The rich are not going to flee the state like

    so many Republicans threaten. (It’s the

    same old ” We’re takin our dolls and going

    home” game.

    2) Close the foreign shore tax haven, tax

    credit for corporations who do work here,

    use all of our infrastructure, but do not

    pay their fair share of taxes to Minnesota.

    3) Raise tax revenue from the top 10%

    earners.

    4) Revisit and amend our State Tax code

    for a more progressive index.

    5) Start listening to what the State Auditor,

    non-partisam offices of Management and

    Budget and Finance are telling public and

    Legislature. Their information is good.

    If none of these are acceptable, eat the rich.

  • Pollianna

    Republicans have convinced us that no matter how low tax rates go, the money’s being wasted.

    Democrats have created spending programs that people like and want to see continued.

    The result? Americans want more government than they’re willing to pay for.

    In a true democracy, you get the government you deserve. Ours spends like crazy but won’t raise taxes. What’s not to love?

  • Steve the Cynic

    “Steve the Cynic, as usual your post is long on talking points and short on details…”

    Shane, that’s as clear a case of the pot calling the kettle black as I’ve ever seen.

  • Josh D.

    Simple. Raise some taxes, cut some spending. No more extremism-all one basket or the other. A little something for everyone to hate usually means a good compromise.

  • Stephanie

    The tax rates were dropped in the 1999 legislative session for the top income levels. We had a huge surplus – we spent millions giving millions back to everyone. We over compensated and need to ease back from that over reaching policy.

    Why is there no sensible middle of the road not too extreme on either side solution? Looks like that’s what the voting population wanted – hence Dayton as govenor and republican house and senate. Compromise people!

  • Shane

    Steve the Cynic, if you look at both of our original posts I state a fact followed by my general opinion about that fact. You make claims about “accounting gimicks”, and inevitable spending which you do not back up with facts. Clearly one of us should have done some more explaining, and clearly it wasn’t me.

  • clark

    Steve the cynic

    I have relocated to Texas along with 150 other executives, all high income and highly educated.

    Income tax revenue loss for MN around $16 M, excluding sales tax and hundreds of new jobs.

    Top 10% of income earners in MN pay 54% of all income taxes in state. what is fair, 100%?

    Hope it snows on you in June

  • T

    And now that your gone Clark and apparantly benefited from Minnesota at some point, your opinion for our state no longer matters. Bye bye now. And enjoy that wonderful “quality of life” in Texas.

  • Neil

    Dramatically reduce taxes on businesses to attract businesses and jobs to Minnesota. Offset the business tax cuts with temporary tax increases on everyone. With enough jobs, we will have adequate revenues and less demand for expensive services. After a couple of years we can reduce personal income tax levels too. We don’t have to be perfect…just better than the majority of other states.

  • Steve the Cynic

    “You make claims about “accounting gimicks”, and inevitable spending which you do not back up with facts.”

    Sorry, Shane. Silly me, I mistakenly assumed you had been paying attention to the news the last few years and I wouldn’t have to spell out the details. I was referring to the money that was “borrowed” from school funding, and the fact that our infrastructure is falling into disrepair. Your supposed “fact” that keeping spending level would solve the budget problem presupposes that what was spent last year was enough, which is clearly a matter of opinion, not fact.

  • JD

    Reassess the government’s proper role in your life and the answers will become quite clear. We are not taxed too little, we simply try to do more than what is appropriate or even morally justified. I simply don’t understand the notion that someone else’s money belongs to me, or that my money belongs to someone else. Besides providing a military, police, fire, and a system of courts to resolve our disputes, what on earth do we need the government for?

  • Steve the Cynic

    JD, the government is the means by which we pool our resources to do those things that are everyone’s responsibility in general but no one’s in particular. What else do we need the government for, beside what’s on your list? How about caring for those who are unable to care for themselves? How about things that aren’t strictly necessary but that make life better for all and wouldn’t happen without pooled resources, such as parks, public schools, roads, and other infrastructure? The society you envision, where everyone cares only for oneself (and perhaps one’s immediate family) is not one I’d care to live in.

  • JD

    Steve, with all due respect, it’s one thing for the government to care for those who CANNOT help themselves, that I agree with. It’s an entirely different thing for the government to help those who WILL not help themselves. I know you wouldn’t like it in the world I envision, based on your posting history. That’s too bad. Unfortunately for me, the world you hope for is actually a reality and it ain’t exactly going so well. Maybe it’s time for a change? And while you’re at it, you may want to drop the “Cynic” portion of your nom de plume, since you’re such a believer in our wonderful system of collectivist redistribution for the “common good,” whatever the hell that is.

  • Steve the Cynic

    “Cynic” has a range of meaning, JD. Although cynical is often used as a synonym for jaded or skeptical, or even nihilistic, that’s not the primary meaning. You might want to educate yourself on what cynicism really is.

    In the mean time, there’s lots to be cynical about in this world. My tendency is to distrust ideology of all sorts. I don’t know where you got the idea that I’m in favor of “colectivist redistribution,” but you won’t find it in my posting history. Maybe you, like so many others who presume to comment on political issues, unthinkingly assume that everyone who disagrees with your stance must be an extremist on the other side. The truth is, I earnestly disbelieve the two equal and opposite superstitions of pure free-market capitalism and pure centrally planned socialism. Both of those ideologies inevitably lead to bad outcomes, and for exactly the same reason: human beings are selfish and will tend to exploit each other if they can get away with it. If it seems to you that I’ve been harder on the “right wing” in most of my posts, that’s only because right-wing silliness has been gaining more traction than left-wing silliness in the last couple of decades.

  • Steve the Cynic

    And furthermore, JD, who the hell are you referring to who advocates government help for people who “WILL not” help themselves? I haven’t heard anyone arguing that the government should do that. Everyone I know, even the leftiest of the lefties, agrees that any well-intentioned policies that have that effect should be revised. Your raising of that issue is a blatant straw-man argument. You caricature the other side and then attack the caricature rather than engaging the real issues. It’s that kind of sleazy, dishonest rhetoric that’s destroying civility in this country.