Kudos to Baird Helgeson of the Strib for his Sunday 1A piece “Governor’s race is all about taxes.” I wish it had been more blunt, but it gave us many of the facts necessary to figure out that no candidate for governor has publicly committed to a program of tax hikes and spending cuts that would balance the budget in the next (2011-13) biennium. That task must be the next governor’s top priority (and perhaps all 10 of the next guv’s top 10).
According to the current projections, the next governor will have to identify a combination of tax hikes and spending cuts totaling $5.4 billion to balance the budget. The state Constitution requires a balanced budget to the start the next biennium on July 1, 2011. Gov. Pawlenty has already used up the known accounting gimmicks for pushing spending into the future and, unless something amazing amazing happens in the upcoming legislative session or in the economy, Pawlenty will leave the state’s finances in shambles for his unfortunate successor to face.
The leading Republican candidates say no new taxes at all. This is for them an article of faith. If they mean it, they are honor-bound to describe — in sufficient detail to enable us to grasp what it will do to schools, health care, poverty programs, etc. — where they would propose to cut $5 billion.
Here’s what they gave Helgeson, first state Rep. Marty Seifert:
State Rep. Marty Seifert, a Republican candidate for governor, said he would reduce entitlement programs, eliminate at least a couple of state agencies and cut aid to local governments instead of raising taxes. All would yield some reductions, although none large enough to balance the budget.
“We have entitlement programs that automatically grow without question,” Seifert said. “That’s really where a lot of these means-testing, downsizing, right-sizing, economizing ideas are going to have to take place.”
Still, Seifert wouldn’t put a price tag on his cuts, or say how deep they could go.
“The state absolutely has to go along without raising taxes and fees,” said state Rep. Tom Emmer, another GOP candidate.
Emmer said he would look at “every fund” to find savings, including K-12 and human services. He also would investigate dedicated funds set up for roads, health care and debt payment.
Emmer did not offer specifics. “I am not going to because I can’t yet, but you have to look at the whole picture.”
On the DFL side, every candidate has said that tax increases will have to be part of the solution. Some have been more specific than others about the size and shape of the tax increase they favor. But many of the tax ideas that are out there raise significant unanswered questions. For example, Mark Dayton says he will raise taxes on the rich. It is a shocking but well-established fact that the wealthiest Minnesotans actually pay a smaller share of their income in state and local taxes than do average Minnesotans. Yes, true.
And Dayton says that if the richest 10 percent pay a share of state taxes payments is equal to their share of state income, that would eliminate half the deficit.
But there’s a catch. The reason for the shocking fact above is that the state gets so much revenue from the inherently regressive sales tax. There’s no obvious way to get the rich to pay a largest share of sales taxes. Dayton wouldn’t answer Helgeson’s question about how he would finesse that problem.
Two of the other leading DFL candidates, Speaker Margaret Anderson Kelliher and R.T. Rybak, had ideas for progressive tax hikes, but neither would raise much revenue. State Senate Tax Chair Tom Bakk knows the tax stuff better than any of the others, and he sponsored the big revenue bill that Pawlenty vetoed in 2009. He still favors that broad income tax hike, which would raise a lot, but not nearly enough.
So far as I can tell, the DFL candidates haven’t been any more forthcoming than the Repubs about what cuts they will make to fill that portion of the budget hole that their tax increases will leave.
I don’t mean to be willfully naive here. Spending cuts are not really popular and tax talk is politically toxic. Republicans love to run against Dems as the party that always favors higher taxes. Promises of no new taxes, tied to promises of a balanced budget by cutting waste, fraud and abuse seem to sell pretty well for Repubs. On the latter point, I would mention that in order to — temporarily and unsuccessfully, via unallotment — balance the current biennium budget without a tax increase, Pawlenty relied on pushing $1.8 billion of school funding into the future with no revenue to pay for it, and when he really to make some cuts, he had to eliminate a program that enables poor people with diet-related health problems to afford food that their doctors said was necessary for their health.
But can we just be naive enough to stipulate that the candidates for governor need to be reasonably straight with us about how they are going to balance the budget?