Paul Thissen, now the Speaker of the Minnesota House of Representatives, is promising to pay off the balance of the K-12 school shift. According to this statement, there has been an IOU to the school districts since 2007:
The proposed budget fully pays back the $854 million IOU to Minnesota schools for the first time since 2007, utilizing a temporary income tax surcharge on only the very wealthiest Minnesotans.
The likelihood of this happening is slim. The chances that this proposed income tax surcharge will be temporary is almost nonexistent, especially with a DFL legislature with an insatiable appetite for spending.
It isn't likely that the revenues will materialize. There's already been a massive federal tax increase that's been signed into law. Gov. Day has proposed a new top state income tax bracket. Gov. Dayton is proposing closing income tax loopholes, too. Now Speaker Thissen is proposing an income tax surcharge on top of all those proposed income tax increases.
There's no reason to think these revenues will materialize. When Maryland passed its 'millionaires tax', people left the state for Virginia rather than pay the tax. There's no reason to think that won't happen if Minnesota businesses suddenly get hit with this onslaught of tax increases over the next 2 months.
Without those revenues, which aren't likely to materialize, it's impossible to pay off $854 million dollars in school shifts, much less increase spending on K-12 and higher education.
If the DFL wanted to intentionally hurt Minnesota's economy, they could pretty much do it with this proposed budget. In fact, it's quite possible that this onslaught of tax increases will hurt Minnesota's economy enough to throw Minnesota's general fund budget into deficit.
According to this MMB statement, Minnesota is projected to run a $7,000,000 surplus. This is based on Gov. Dayton's revised budget. That isn't leaving much room for an economic downturn.
Hitting Minnesota businesses with this many tax increases will almost certainly cause an economic downturn.
Speaker Thissen can talk about paying off the school shift if he likes. It just isn't likely to happen. If he were being honest, he'd admit that.
Comments