Minnesota Tax: Targeted cuts, more tax revenue, improving economy

29 May 2010 -- When Minnesota's next Governor takes office, our state will likely face the worst budget crisis in its history. For too long, fiscally irresponsible decision-making and an addiction to one-time fixes have pushed this problem down the road and made it even worse.

"Cuts Alone" and "Tax the Rich" are slogans, not solutions. Slogans won't solve this crisis. Minnesotans need a Governor who will tell them the truth - not a Governor full of empty promises and phony campaign pledges. It's time for a balanced approach; a solution that fairly and responsibly puts Minnesota's budget back on solid footing.

It's not going to be easy, and it's not going to happen overnight, but we've got to start making responsible decisions today that will make us stronger in the long run.

As Governor, I will enact a fiscally responsible budget that renews the promise of Minnesota: a budget prioritizing strong schools, good jobs, and sound infrastructure. I will finally bring stability to the state's finances, and build the bridge to a better, more prosperous future.


Fighting for Every Minnesota Tax Dollar

The first thing I will do as Governor is bring $1.4 billion for hospitals home to Minnesota. That's money Minnesota taxpayers already send to Washington, D.C. It is our money, and we should bring it home. My opponent, Tom Emmer on the other hand, would rather force Minnesota to forfeit $1 million every day to other states.

Those recaptured dollars will create 22,000 Minnesota jobs, and those jobs mean even more jobs will be created as the new dollars keep recirculating through our economy.

Right now, Minnesota only gets 74 cents back for every dollar we send to the federal government. As Governor, I will fight for every Minnesota tax dollar. As Governor I will restore an aggressive commitment to bringing Minnesota tax dollars back to our state - because the hard working people of this state deserve to get their money's worth.


Fair and Progressive Taxation

As Governor, I will ask the wealthiest Minnesotans - those earning more than $250,000 - to contribute their fair share. That will raise an expected $600 million that will help keep our commitment to Minnesota students, senior citizens, and the essential services that make our state great.

According to the Department of Revenue's Tax Incidence study, middle- and low-income Minnesotans pay 12 percent of their income in state and local taxes. Minnesota's highest earners pay only 8 percent.

Minnesota's system of fair and progressive taxation is how our state has kept the promise of a nation-leading education system, good jobs, and a high quality of life. It's time to renew Minnesota's commitment to that progressive tax structure.


Targeted Budget Cuts that Protect Minnesota Priorities

Let's be honest, Minnesota's next Governor can't raise enough taxes, or cut enough from the budget to solve this problem. As Governor, I will be honest with Minnesotans: we have to take a balanced approach.

Unlike the irresponsible slash and burn politics of the last eight years, I will carefully build a budget based on Minnesota's highest priorities - strong schools, good jobs, and sound infrastructure.

I will rely on the expertise of people like my running mate John Gunyou, who as Finance Commissioner under former Governor Arne Carlson helped our state recover from an equally difficult budget crisis. And he did it without cutting education or sacrificing Minnesota values.

Facing serious economic and fiscal challenges, there are some things our state can no longer afford.

Each year, Minnesota spends $11 billion on tax expenditures. Some of those expenditures are necessary to keep Minnesota's business climate competitive and help middle class families. But others are just giveaways to corporations that shelter profits in offshore tax havens, and use tax loopholes to evade their responsibility to our state. As Governor, I will fight for ordinary Minnesotans and crack down on these schemes. That will bring an estimated $400 million back to Minnesota.


Fighting Fraud, Waste and Mismanagement

As Governor I will crack down on fraud, waste and mismanagement that is taking money from our students, seniors, and working families. My administration will create an Office of the Human Services Inspector General who will root out fraud and make certain every tax dollar is spent appropriately, on the service for which it was intended.

Some studies show that fraud in Health and Human Services spending cost the state about $100 million every year. So there is much more work to be done to crack down on fraud inside and outside of state government, and rebuild Minnesotans' trust in a smart and efficient state government.

As Governor, I will also crack down on waste and mismanagement within state government. A $30 million computer system that never became a reality - that's the kind of waste I will eliminate as Governor.


Improving Economy

Minnesota's economy is improving - slowly. The work we did last session to invest in infrastructure and improve Minnesota's business climate has helped. Those efforts alone will create another 30,000 jobs over the next year and a half. As Governor I will continue my aggressive focus on bringing good-paying jobs to Minnesota. I will leave no stone unturned as I fight to grow jobs and restore opportunity in our state.

Because the economy is changing, Minnesota's budget forecast may improve over the next several months. Due to the volatility of budget forecasts, the state's financial situation can change significantly from one forecast to another.

In just three month's time between last year's November and February budget forecasts, improving economic conditions shrank the deficit by more than $200 million. Between the 2005 February Forecast and the 2006 November Forecast, Minnesota's deficit shrank by nearly $1 billion.

Until we know how deep the hole is, no candidate in this race can honestly predict how big the deficit will be next year. Like all Minnesotans, I am hopeful the job creation efforts I led in the legislature will put thousands of Minnesotans back to work, and improve the state's overall fiscal challenges.


Responsible Use of Temporary Budget Tools

Minnesota's fiscal health is about as bad as it can get. Our state can only get better from here. That's why some shifts may be necessary to build a bridge to Minnesota's future - shifts that as Governor I will require by law to be paid back as soon as the state's finances are in order.

One-time budget tools buy us time for long-term revenue increases and spending reductions to phase in. Unfortunately, the Pawlenty administration simply used them to avoid the tough choices. That kind of short-term thinking will have no place in my administration.

It's time we had a governor who is courageous enough to lead us through these challenging times, and renew the promise of Minnesota.