COGD Finally Comes to Tax-and-Spend Minnesota

Minnesota residents must work longer than 41 other states to pay for their share of government spending and regulatory burdens.  This year, the state “celebrates” its Cost of Government Day ten days after the national average on July 15.  In order to afford the costs of government spending and regulation, workers must labor for 207 days- keeping less than half of what they earn for themselves.

In response to increased taxes, Minnesota suffers from inflated spending.  Over the past ten years, Minnesotans have experienced a total tax increase of $11.12 billion; or, a tax hike of $2099.52 for every man, woman and child.  During a time when legislators should be cutting spending, Governor Dayton is pushing for increased taxes.

After a 20 day state government shutdown, Governor Dayton finally signed into law the biennial budget for FY2012-2013.  The shutdown developed from failed negotiations between the Governor and the Republican led legislature.  Governor Dayton argued for tax increases to close the $5 billion deficit, while the legislature aimed for spending cuts. Finally, the Governor signed into law a $35.9 billion budget- reaching an agreement with Republicans and rejecting his proposal to increase taxes on tobacco and alcohol.  To balance the $1.4 billion budget difference, $700 million was raised through bonds tied to the 1998 tobacco settlement and an additional $700 million in payments to school districts were delayed until FY2013.  Governor Dayton accepted the Republicans offer, making a healthy decision to not hike taxes. 

With Republicans in Minnesota taking a strong stance against raising taxes, the legislature was able to pass a budget that enforced fiscal responsibility.  Compared to 2011, the state’s Cost of Government Day falls two days earlier this year – if the legislature continues to practice fiscal responsibility the state may see an even earlier Cost of Government Day next year!