Bob CollinsIn the aftermath of Wednesday’s announcement that the state is again facing a massive budget deficit, it’s clear that the debate over taxes is going to be repeated, with little chance that either side is going to cave.
Gov. Pawlenty said he’s prepared to work with the DFL-controlled Legislature, but made it clear it’s conditioned on the Legislature doing it his way.
“State government needs to live within its means,” Pawlenty said. “We must also take steps to make Minnesota more competitive for private sector jobs, not just government jobs. That includes holding the line on taxes.”
“We can’t solve the whole problem by raising revenues, but it is unsustainable to continue to address budget deficits almost entirely by relying on one-time resources, spending cuts and budget gimmicks,” counters the Minnesota Budget Project.
How are states with lower taxes doing in this economy? Not very well. Here’s a comparison based on their tax rank and their current unemployment rate. Those rows in orange are states with unemployment rates higher than Minnesota’s. (Update: I should’ve added: “and a lower tax collection per person.”)
| State | Total Taxes | Population | Taxes per person | Unempl. |
| South Dakota | $1,321,368,000 | 804,194 | $1,643 | 5 |
| New Hampshire | $2,251,179,000 | 1,315,809 | $1,711 | 6.8 |
| Texas | $44,675,953,000 | 24,326,974 | $1,836 | 8.3 |
| Missouri | $10,965,171,000 | 5,911,605 | $1,855 | 9.3 |
| Tennessee | $11,538,430,000 | 6,214,888 | $1,857 | 10.5 |
| Georgia | $18,183,117,000 | 9,685,744 | $1,877 | 10.2 |
| South Carolina | $8,455,463,000 | 4,479,800 | $1,887 | 12.1 |
| Oregon | $7,250,033,000 | 3,790,060 | $1,913 | 11.3 |
| Alabama | $9,070,530,000 | 4,661,900 | $1,946 | 10.9 |
| Colorado | $9,624,636,000 | 4,939,456 | $1,949 | 6.9 |
| Florida | $35,849,998,000 | 18,328,340 | $1,956 | 11.2 |
| Arizona | $13,705,901,000 | 6,500,180 | $2,109 | 9.3 |
| Utah | $5,944,879,000 | 2,736,424 | $2,172 | 6.5 |
| Mississippi | $6,618,349,000 | 2,938,618 | $2,252 | 9.8 |
| Iowa | $6,892,026,000 | 3,002,555 | $2,295 | 6.7 |
| Ohio | $26,373,813,000 | 11,485,910 | $2,296 | 10.5 |
| Oklahoma | $8,484,227,000 | 3,642,361 | $2,329 | 7.1 |
| Indiana | $14,916,295,000 | 6,376,792 | $2,339 | 9.8 |
| Nebraska | $4,175,471,000 | 1,783,432 | $2,341 | 4.9 |
| Nevada | $6,115,584,000 | 2,600,167 | $2,352 | 13 |
| Kentucky | $10,056,293,000 | 4,269,245 | $2,356 | 11.2 |
| Virginia | $18,408,276,000 | 7,769,089 | $2,369 | 6.6 |
| Idaho | $3,651,917,000 | 1,523,816 | $2,397 | 9 |
| North Carolina | $22,781,199,000 | 9,222,414 | $2,470 | 11 |
| Illinois | $31,890,597,000 | 12,901,563 | $2,472 | 11 |
| Michigan | $24,781,626,000 | 10,003,422 | $2,477 | 15.1 |
| Louisiana | $11,003,870,000 | 4,410,796 | $2,495 | 7.4 |
| Montana | $2,457,929,000 | 967,440 | $2,541 | 6.4 |
| Kansas | $7,159,748,000 | 2,802,134 | $2,555 | 6.8 |
| Pennsylvania | $32,123,740,000 | 12,448,279 | $2,581 | 8.8 |
| Rhode Island | $2,761,356,000 | 1,050,788 | $2,628 | 12.9 |
| Arkansas | $7,530,504,000 | 2,855,390 | $2,637 | 7.6 |
| Wisconsin | $15,088,662,000 | 5,627,967 | $2,681 | 8.4 |
| West Virginia | $4,879,151,000 | 1,814,468 | $2,689 | 8.5 |
| Washington | $17,944,925,000 | 6,549,224 | $2,740 | 9.3 |
| Maine | $3,681,614,000 | 1,316,456 | $2,797 | 8.2 |
| New Mexico | $5,674,530,000 | 1,984,356 | $2,860 | 7.9 |
| Maryland | $16,605,830,000 | 5,633,597 | $2,948 | 7.3 |
| California | $117,361,976,000 | 36,756,666 | $3,193 | 12.5 |
| New York | $65,400,355,000 | 19,490,297 | $3,356 | 9 |
| Delaware | $2,930,955,000 | 873,092 | $3,357 | 8.7 |
| Massachusetts | $21,836,357,000 | 6,497,967 | $3,360 | 8.9 |
| Minnesota | $18,320,891,000 | 5,220,393 | $3,509 | 7.6 |
| New Jersey | $30,616,510,000 | 8,682,661 | $3,526 | 9.7 |
| North Dakota | $2,312,056,000 | 641,481 | $3,604 | 4.2 |
| Connecticut | $13,367,631,000 | 3,501,252 | $3,818 | 8.8 |
| Hawaii | $5,147,480,000 | 1,288,198 | $3,996 | 7.2 |
| Wyoming | $2,168,016,000 | 532,668 | $4,070 | 7.4 |
| Vermont | $2,544,163,000 | 621,270 | $4,095 | 6.5 |
| Alaska | $8,424,714,000 | 686,293 | $12,276 | 8.9 |
Tax data is for 2008 and it comes from the Census Bureau. Unemployment rates are through October and come via the Bureau of Labor Statistics.
Is that the end of the argument? Of course not. There are any number of ways to break down taxes and tax burdens. There’s obviously an argument to be made — though it requires some proof — that lower taxes in a state might bring down unemployment in that state. And, besides, all states aren’t created equal. Some are agrarian states, some are sitting on piles of oil, and some make cars. Some states’ economies are more diverse than others. By the way, I can’t explain Alaska’s figures, but I suspect it has something to do with oil revenue. The tax-per-person figure isn’t the same as the tax burden per person. But it does show that — at least for this narrow amount of data — a low per-person tax total — isn’t any guarantee that your state’s economy will be better than a high per-person tax total.
In other words, it’s part of the discussion on the philosophies which will be at the heart of the coming debate.
So, go ahead! Discuss!
