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Minnesota tax collection rate now 13th in nation, tax group says

Minnesota’s total state and local tax collections ranked 13th highest in the nation per capita in fiscal year 2007, up one spot from the year before, says the Minnesota Taxpayers Association, which describes itself as “a nonprofit, nonpartisan organization dedicated to the advancement of efficient, economical government.”

But looking at the numbers another way — tax collections per thousand dollars of personal income, Minnesota ranked 19th, down one spot, says the group, which used census data and calculated certain revisions in personal income.

Personal income remaining after state and local taxes was 88.2 percent, placing Minnesota 32rd in the nation, the group reports.

As for spending, state and local government “direct general expenditures” ranked 14th in the nation on a per capita basis (up from 15th in 2006) and 32nd on a per thousand dollar of income basis (down from 30th in 2006).

Other interesting notes from the study:

  • Spending on public welfare, highways, and libraries all exceed 120% of national average spending on both a per capita and per $1,000 of income basis, the group said.
  • But spending on fire protection and corrections are 80% less than the U.S. average on both a per capita and per $1,000 of income basis.
  • In total spending, Minnesota is close to the U.S. average for both the income and per capita measures.

“In some cases higher relative spending levels reflect the need and inherent cost issues of providing these services in Minnesota,” said Mark Haveman, executive director of the MTA. “For example, Minnesota has one of the largest amounts of highway lane miles in the nation. Combined with maintenance demands of Minnesota winters, it easy to see why our spending would be above the U.S average. But these figures also reflect conscious choices being made by governments in establishing budget and spending priorities.”

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