Minnesotans Deserve Honesty in Budget
There are seven days left for the Governor, the Senate, and House Republicans to reach agreement on a state budget. Unfortunately, the budget House Republicans passed is so extreme that it is unlikely they can reach agreement before May 18th, when the legislature must adjourn.
It was only four years ago that Republicans in control of both the Minnesota House and Senate caused the longest state shutdown in U.S. history, and it looks like we may be headed back that way. That’s because the Republican budget relies on shifts, tricks, and gimmicks that would return Minnesota to a decade of budget deficits.
The centerpiece of their plan for the state is a $2 billion tax cut package that the Republican tax chair calls the “Don’t Stop Believin’” tax plan. That name is apt because the package requires Minnesotans to believe that huge tax breaks for large businesses and corporations will trickle down to everyone.
The Republican tax package includes middle-class tax cuts that last only two years, but also more than half a billion dollars in permanent corporate tax cuts that balloon in the future. The middle class tax cut would reduce taxes on average $130 per household for only two years. A single-filer earning $75,000 per year would get a $70 tax cut in 2015 that would go away after two years.
The bill phases out the statewide property tax on businesses and corporations – many headquartered outside of Minnesota and some even outside the U.S. It also gives a tax break to wealthy estates. Under current law, estates under $1.4 million are exempt from the estate tax but the Republican plan exempts estates under $5 million. Over the next four years, for every $1 tax cut for average Minnesotans, $29 would go to corporations and the wealthy under the Republican tax bill.
To pay for their tax cuts, House Republicans treat all other budgets as though the state faced a deficit instead of a $2 billion surplus. Their Early Learning and K-12 budget is so stingy that schools, including the Rochester school district, will have to cut budgets and lay off teachers.
But the most unhealthy part of the House Republican budget is their Health and Human Service (HHS) bill. For months the legislature heard from Minnesotans that many needs in our state are still unmet. Caregivers in nursing facilities and in-home and community-based programs are so poorly paid that they are leaving for other work. Low-income children and adults are unable to get needed dental care. Our mental health system needs help. Republican House members could not say no to these real needs. In fact, House Republican legislators proposed about $1 billion in new spending on HHS services. But when Republican leaders decided to allocate the surplus entirely to tax cuts, a cut of over $1 billion had to be made in the HHS budget. How could they make such a deep cut and still spend hundreds of millions of new dollars?
The resulting budget is a fraud. The biggest single cut eliminates MinnesotaCare – a health insurance program for 100,000 low-income working Minnesotans – so they can capture the provider taxes that pay for it. This endangers the health insurance of almost 2,000 people in Olmsted County alone to help pay for tax cuts weighted heavily toward the wealthy.
The rest of their HHS cuts are budget shifts and gimmicks. When the fiscal analysts said ‘don’t count on the savings,’ they did anyway. They also slash agencies and programs without knowing what services will be lost or whether savings can really be achieved. They pay bills late and call it “savings.” They increase efforts to detect error and fraud in public programs and count on huge savings that may never appear. They might as well deposit a lottery ticket in the checking account and call it cash.
Minnesotans deserve honest budgeting. In a year when Minnesota’s economy has generated $2 billion more than was expected, our state can afford better schools, affordable tuition at public colleges, help for students paying off high debt, an adequate safety net, and other things that strengthen our economy and prepare us for the future. The House Republican budget would give us none of these things. Instead, it would give away Minnesota’s prosperity at the expense of our kids and our future.
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