Give your input on the budget
By: Joe Mullery 05/01/2009
Because of the collapse of large sections of the economy, loss of state revenues has caused a deficit in the state budget of nearly $6.5 billion for each of the next two biennia. $2 billion in federal money will help in the first biennium, but not the second.
Even before the economic downturn, Minnesota government was frugal. We were among the 17 lowest states in the amount of our state and local expenditures when compared to total personal income.
Unlike Governor Pawlenty, I believe we have to raise revenue. If we put in a fourth income tax tier for people making over $400,000 per year and set the tax rate for it at 9 percent, we would gain $400 million for the biennium. Taxing incomes over $250,000 at 9.7 percent would raise $800 million. If we went back to the pre-1999 tax rates (most people didn't even realize we reduced rates then) we would gain $1.7 billion for the biennium.
If we put the sales tax on food, we'd gain $1.2 billion; on clothing-$700 million; car repair-$300 million. If we had a sales tax on all services-$2 billion. If we raised the present sales tax by 1 percent-$1.3 billion.
We'll also have to cut expenditures. Some people say to cut state government, but if we fired every state employee it would only save $3 billion-less than half of the ongoing deficit. Others say cut welfare (referring to the old AFDC program) but that makes up less than one-half of 1 percent of the budget.
Half of the budget is education, and more than a third goes to health and human services (of which half is basic health care and over a third is long-term care such as nursing homes). A tenth goes to homeowners and renters in various ways to reduce property taxes.
As always, I want your input on the choices we have to make, both on revenue increases and spending cuts. You can reach me at 367 State Office Bldg. St. Paul, MN, 55155; 651-296-4262; or rep.joe.mullery @house.mn.
Joe Mullery,
MN House of Representative, 58A