Too much government spending, not to mention spending on the wrong things, can detract and even undermine the private investment and entrepreneurial spirit necessary for economic growth.
Yet, here we are today, living with a $39 billion budget that is too costly in the eyes of many and now Gov. Mark Dayton has announced he wants to raise our General Fund spending to $42 billion in 2016-17. That’s a 25-percent jump since Dayton took office. His plan would push our All Funds budget, which includes federal dollars, from $71 billion to $77 billion.
Apparently, the 12-percent increase in state spending in the last budget was more than enough for some.
Just two years ago Dayton and fellow Democrats passed the largest tax increase in state history. Now, he proposes a 6.5-percent tax on wholesale gas, which translates to around 16 cents per gas. This would cost drivers hundreds of dollars per year, negatively impacting even the people who can least afford it.
We seem to have a problem with adhering to budget priorities in America and Minnesota is no different. At some point, higher and higher state spending – even on good things like education and welfare – undermine a state’s productivity and the well-being of all of us. Not to mention millions of dollars in wasteful spending the governor proposes spending on a broken MNsure program and rent for an unnecessary Senate office complex.
Weren’t we told MNsure would be self-sustaining?
Such massive increases in spending and taxation are not sustainable and jeopardize our future stability, especially when you take into account our state’s aging workforce. Increased spending depends on higher taxes and higher taxes discourage work, savings and investment – all of which are vital for a productive and prosperous state. Moreover, spending itself can and has discouraged productivity when it reduces incentives to work.
Furthermore, reports show more Minnesotans will reach retirement age this decade than the four previous decades combined. That means a smaller percentage of citizens will be working and paying taxes to support a greater portion of our society. Add unbridled tax-and-spend habits to that mix and you have a recipe for fiscal disaster.
The focus should be on ways we can make better use of existing tax revenue. For example, I am working on legislation that would allow better coordination among clinics in delivering care and services to the elderly, impoverished, disabled and more.
The House will provide its own budget proposal after Minnesota’s new economic forecast is issued, providing us with a firm set of figures. Expect much debate on spending priorities as the session progresses in the areas of transportation, long-term care, property tax relief, local aids and much more.