Just as the War of 1812 is sometimes referred to as the “Second War of Independence,” so too can one compare this year’s budget battles to a refighting of the 2007 legislative session. The 2007-2008 session — the longest in Minnesota’s 150-year history — is over, and with it any hope that conservatives might have been able to salvage some kind of victory after February’s veto override vote.
As we all know by now, one of the first “accomplishments” of the session was passage of one of the largest tax increases in Minnesota history — $6.6 billion in new taxes to fund transportation. Not only will Minnesotans see higher gas taxes, higher sales taxes, higher license-renewal taxes and new-car-registration taxes, a good chunk of the money will continue to be wasted on light rail and other transit boondoggles; even though transit proponents now admit it won’t reduce congestion in the metropolitan area.
One of the few places conservatives had reason to be hopeful for a fiscally responsible outcome was the budget deal that would come from the end-of-session negotiations. This hope, however, proved to be unfounded. The state’s $935 million budget deficit seemed to be no obstacle to the tax-and-spend philosophy of most of our elected officials. Combined with the budget passed during 2007, state spending grew by 9.8 percent and totaled over $3 billion dollars this biennium. And when state lawmakers were forced to make cuts in 2008, their budget-balancing act reduced spending by a whopping 1 percent from the $34.5 billion budget.
Epitome of waste and abuse
And then we come to the bonding bill. What better representation of waste and abuse can be found in Minnesota politics than the capital investment bill? The initial proposals introduced in the House and Senate blew the doors off the State’s historically recognized debt capacity caps. And when Minnesota’s fiscal managers said so, state lawmakers just shrugged.
A brief respite was provided when Gov. Tim Pawlenty line-item vetoed more than $200 million worth of unnecessary projects. But, as they say, no good deed goes unpunished and in a nearly unprecedented move, legislators introduced another bonding bill to “leave no special interest group behind” and made the first $70 million down-payment for the billion dollar Central Corridor light-rail line.
While small-business owners in Minnesota may have been temporarily saved from (yet another) minimum-wage increase, some of our state’s largest employers will find our tax climate has taken one more step toward the fondest dreams of Messrs Marx and Engels with a tax increase on profits earned overseas.
Cap offers little protection
But what was the one thing that was supposed to mollify Minnesota conservatives and make all the other compromises worth the previous three-plus months of pain? That’s right: a 3.9 percent property-tax cap. A cap that, upon closer inspection, isn’t all it’s cracked up to be.
With a long list of spending exemptions and an assessment system that has home values rising instead of falling, I’m afraid the cap offers little protection for homeowners against property-tax increases.
As an entrepreneur, small-business owner and active participant in Minnesota politics over the last decade, I don’t think I’ve ever been happier that legislators have finally gone home. My only hope now is that they won’t strain their arms by patting themselves on the back for what a wonderful job they’ve done.
Mike Wigley is the founder and chairman of the Taxpayers League of Minnesota.
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