For the last decade, Minnesota’s finances have lurched from one disaster to another. With insufficient revenues, lawmakers have patched the budget together with different accounting gimmicks each biennium. When the recession hit, even those tricks weren’t enough to prevent painful spending cuts.
Mark Dayton’s budget would restore stability to both our revenues and our expenditures. On the revenue side, he would rebalance our tax system, reducing property taxes while increasing sales and income taxes, as the image to the right illustrates. The broader sales tax base will make the sales tax less variable and more reliable, and will allow us to increase revenues while lowering the tax rate. And under Dayton’s plan, the rich will finally pay their fair share in taxes.
Dayton’s budget will also restore spending to the minimal level needed to maintain state services. The chart below shows the amount of spending required to just keep pace with inflation and population growth. For the last two biennia, we’ve fallen below that minimal level of spending. Dayton’s budget restores stability to our state’s spending.
There’s a case to be made that we should go farther than merely restoring stability. As I said, expenditures under Dayton’s budget would be the minimum needed. Raising another billion or two would allow us to make much-needed investments in areas like higher education, transit, and social services, all of which have suffered from neglect over the past decade. But while it doesn’t go quite as far as I’d like, that’s really just a quibble. In the end, what’s important is that Dayton’s budget would finally restore fiscal responsibility to Minnesota.