At a recent speech, one of Minnesota’s most prominent and successful entrepreneurs was asked if the state still was a place that supported innovative enterprises. There is no better place than Minnesota, he said, especially in his field of medical device development and manufacturing. Minnesota has the critical mass of people, research and facilities that set it apart from other locations.
He then added this, comparing Minnesota to a country club: “If you want to belong to a high-end country club, you have to expect to pay the dues.”
Fair point. Minnesota offers a high quality of life to most residents. The state’s population is well-educated, enjoys world-class natural and cultural amenities, is safer than most places in the country (even with a recent spike, the rate of violent crime rate in Minnesota is 30% lower than the national average), has a median household income well above the national average (and a poverty rate that ranks among the lowest of all states) and residents of Minnesota are among the healthiest people in the nation.
Gov. Tim Walz and the DFL majorities that control both chambers of the legislature have big plans to make Minnesota even better, particularly to “make it the best state in the country for children,” in the governor’s words.
Who can argue with that lofty goal? Recalling the Time Magazine cover story of 50 years ago that praised Minnesota as the state that works, Walz is calling for a new “Minnesota Miracle” to reduce the number of children in poverty, to support families, to make communities safer, to expand affordable housing programs, to move Minnesota more aggressively to a carbon-neutral future and to achieve other long-sought DFL goals.
To paraphrase Mel Brooks, “It’s good to be the king and to have an $18 billion budget surplus.”
Without question, the DFL agenda tackles a panoply of critical issues. But are the solutions part of a new “Minnesota Miracle,” as Walz promises, or just adding massive amounts of money to put temporary patches on longstanding challenges?
The fact is that there is precious little true reform or innovation in the DFL programs and a lot of unsustainable funding, much of it propping up broken or inefficient systems. Look at the state’s public schools. Minnesota has about 330 school districts serving 827,000 students in a bit more than 2,000 E-12 schools throughout the state. The average district – with all the administrative costs that go into running a school district of any size – is serving about 2,500 students in six schools. Remove the three largest metro-area school districts and the numbers are even more out of whack.
Small school districts have the same challenges whether they are in rural parts of the state or in the suburbs of the Twin Cities. There simply aren’t the number of students necessary to support high-level, diverse curricula, especially in math and science. The DFL’s plan to add more than $2 billion to school funding formulas doesn’t address that fundamental problem. Absolutely, more money helps and is needed. But better, more efficient uses of all public dollars to achieve better outcomes is even more critical.
Government programs – free from accountability and evaluation – too often take on lives of their own. Quality gives way to expediency. MinnesotaCare is a case in point. This innovative program was created in 1992. It addressed a fundamental need for many Minnesotans who were working in jobs that paid wages too high to qualify workers for Medicaid but too low for them to afford health insurance in the private marketplace.
Over the years, MinnesotaCare worked spectacularly well, contributing to making the state one of the healthiest in the nation. But MinnesotaCare also came to face the same dilemma challenging every insurer – rapidly rising health costs. Rather than address the thorny core problem of controlling health costs, legislators did what they often do. They buried the problem. Instead of a solution, they applied a patch – reducing reimbursements paid to health providers, especially dentists.
The long story short is that as reimbursements paid to dentists fell far below the cost of providing care, many dentists made the unfortunate but necessary decision to stop providing care to those enrolled in MinnesotaCare. An estimated two-thirds of children in public programs received little or no basic dental care.
While the state has moved to increase payments to dentists in recent years, a generation of children in low-income families face a lifetime of preventable and expensive health problems, including chronic physical health issues, because they were denied preventive dental care. Those costs don’t go away. A study by the Minnesota Department of Health a few years ago found that Minnesotans with chronic health conditions account for 83% of all health care spending. The average annual medical spending of Minnesotans with at least one chronic condition is eight times the amount of those with no chronic conditions. Are all these chronic conditions due to poor oral health care in childhood? Of course not. Could many of these conditions and their related costs have been prevented by spending a few more dollars for dentists? Absolutely.
Don’t misunderstand. Walz and the DFL are tackling issues vital to Minnesota’s future. But the solutions they are offering aren’t sustainable. Even the Democrats recognize that if the answer to today’s challenges always is more money, then more money always will be needed. The DFL is proposing a host of new taxes, including a new income tax rate of 10.85% on the state’s wealthiest. That would give Minnesota the third highest marginal rate in the country.
Minnesotans have voted to enjoy the amenities of a high-end country club. But the state also has to compete with other states for people, investments and businesses and there is growing evidence that the state’s taxes are tipping the balance in favor of other locations. The total tax burden in Minnesota – total state income, property and sales and excise taxes as a share of total personal income – is eighth highest, according to WalletHub. Minnesota’s lowest marginal individual income tax rate is higher than the TOP rate imposed by half the states.
Minnesota Democrats would build a better future if they did the heavy lifting of reforming outdated systems and programs, not just propping them up with new spending.
Republicans aren’t off the hook for standing on the sidelines of reform. Too much of their time and political capital is spent on promoting tax cuts and waging culture wars.
[image_caption]Tom Horner[/image_caption]
Democrats could have used this year to study the very real problems they seek to address and find new solutions. Republicans could have moved beyond the agenda of the far right and offered a meaningful voice. Both chose more narrow political paths. As a result, Minnesota’s “country club” may have more amenities, but fewer people who can afford (or are willing) to pay the dues.
Tom Horner is a member of MinnPost’s board of directors. This commentary was reprinted with permission, and originally appeared on his blogsite, Politics and Policy at the Innovative Center.
We’re reminded that public education isn’t very profitable. There’s just not a sufficient demand for enlightened well-rounded and informed individuals who eventually enter the job market and begin to pay their share of the taxes it takes to have public education.
Iowa has seen the light, and will start putting those expensive wards of the public schools to work– preferable at good paying jobs like cleaning slaughterhouses and milking cows and cleaning hog barns. /s
Mr. Horner, I’m suspicious… do you write under a pseudonym here? I think you could be one of the taxaphobes we read every day! 🙂
There are many people who pay their fair share of taxes and have no problem with it; however wages for many have not kept pace; housing prices have increased, trying to save for retirement, pay for medical care, etc.. Horner nailed it in this article.
Working from home needs to considered. Even though the total number has decreased since COVID, it’s being touted as an employment perk for white collar employees. 100% remote work, particularly from other states, is not uncommon. Big businesses are using this to expand the their talent pool.
It is disingenuous to use MinnesotaCare dental reimbursement issues to claim MinnesotaCare is a failure for children. Very, very few children are enrolled in MinnesotaCare, only children in households with complex tax filing situations end up in MinnesotaCare as part of a safety net policy. Children with family income below 200% FPG are in Medical Assistance, not Minnesota Care. It is the Minnesota legislature who has failed to increase funding for dental care under both MA and MinnesotaCare. It is NOT a failure of MinnesotaCare.
Mr Horner writes
“Minnesota has about 330 school districts serving 827,000 students in a bit more than 2,000 E-12 schools throughout the state. The average district … is serving about 2,500 students in six schools. Remove the three largest metro-area school districts and the numbers are even more out of whack.”
Yep, those numbers are daunting. But I’m not seeing what you’re proposing as a solution. An unstated problem contributing to the challenge is that so many of those school districts are rural, drawing students from large areas. Hauling kids around on busses is expensive. Finding teachers for rural districts is probably challenging. Whatever the sokution is, it’s probably going to cost money. Do we spend it, or just leave them behind?
I’ve seen companies throw $ at markets for years and years, just like city, county, state governments, the problems never get solved and they never move, if you don’t have a real action plan with responsibilities and measurable results, nothing will change. Exactly why we have inter generational poverty, throw $ at problems and never asked the folks receiving the $ to take some responsibility for their and their families end result, just keep blaming society. DFL’s main problem, heart is in the right place but their head is not, the farther left, seems the dumber they get on accomplishing real results, the “R” folks just the opposite, with the same results, farther right they get the dumber they get, and all the folks towards the middle tend to just shake our heads.
It’s important to establish one basic fact at the outset when considering anything Mr. Horner offers… Horner is a Republican. Many “independents”, especially those who call themselves “moderates”, and in fact many “moderates” be they independents or even Democrats, are just Republicans who don’t want to call themselves Republicans for some reason.
The reason this is a significant and important observation is because you will note, that invariably when it comes to policy or opinion, these folks will opt for conservative magical thinking, and almost never consider liberal ideas or policies, despite claiming to be “independent”. Now I’m not complaining about bias, I’m simply establishing a fact of mentality.
The recognition of republican/conservative magical thinking allows us to note that the republican pre0ccupation with “innovation” is just one of many examples of their magical thinking. Most if not all of the time this pretense of appreciation for innovation simply obscures a completely incoherent concept of innovation that has zero application in the real world. For Republicans and conservatives “innovation” is simply a buzz word they use to rationalize their tax and budget cuts. For all their worship of innovation you may have noticed that the ONLY innovation they’ve managed to imagine for decades is tax and budget cuts. This is because lacking any REAL understanding or workable concept of innovation, it’s just another term or concept they’ve weaponized to service their ideology.
Conservatives like the “idea” of innovation because their mentalities are trapped with concentric circles of stereotypes, i.e. “innovation” is cheap, “innovation” is private sector efficiency, “innovation” flows out of deregulated environments. These are all incoherent assumptions that simply justify magical budget proposals and fiscal irresponsibility. Of course this constellation of magical and stereotypical thinking always dictates that appropriate levels of funding for government agencies are an attack on “innovation”. Increased spending, and rational and sufficient revenue streams (i.e. taxes that actually fund government) inhibit creativity and “innovation”, but this “reasoning” is invariably facile. Note, not once anywhere in his article does Horner off any kind of “innovative” suggestion other than spending less on it.
So the only guys in the room who wouldn’t know an innovation if you dropped one on their heads are always the ones prattling on about the magic of innovation. “Innovation” isn’t simply a synonym for budget cuts. The truth is innovations often require additional spending, massive investment, and regulatory structure. The idea that simply spending less will somehow promote innovation, or that spending more, reduces innovation, is irrational.
Innovation flows out of a human capacity for creative thought and problem solving, not mediocre intellects prattling on about something they themselves have no capacity to produce. And yes… this jargon of “innovation” flows out of the private sector that has wasted billions if not trillions of dollars on consultants, workshops, and seminars pretending to “incubate” innovation. So yes, it’s not at all difficult to find examples of wasted spending in the private sector, but that doesn’t mean less spending in the private delivers more “innovation” right? But spending in the public sector is a violation of the sacred principle of “innovation”?
Republicans have had decades to produce their innovative, cheap, efficient, government; all we’ve ever get out that magical thinking is budget crises, deficits, and recessions. We’re not throwing money at problems, we’re funding government agencies so they can function properly. If you REALLY understood anything about “innovation” you would know that it has nothing to do with cutting budgets or spending.
“all we’ve ever get out that magical thinking is budget crises, deficits, and recessions.”
Sounds like the first 2 years of the Biden administration.
Not to get cross wise, but deficit spending is pretty common regardless of the party as of late, how much and for what should be the discussion. There has not been a recession under Biden, unless its a magical one that you made up. Perhaps you can explain the budget crisis other than the one the “R” folks are trying to create. Honesty is always a nice place to start, regardless of which hat you are wearing. It is also possible to lean right on certain issues and left on others which suggests, that 1 size does not fit all, however for our politicians it appears more and more polar left or polar right, which is basically a cancer on our country and democracy.
Of course, there’s also the fact that many of the DFL proposals and the legislation already passed, that protects voting rights, and abortion rights, and personal freedoms, IS innovative. The fact that money is being spent doesn’t mean that there’s no innovation taking place. And we’d do well to note that there’s an important difference between being innovative, and being stupid.