Dayton Has the Right Approach

"Opinion"

08/31/2010

Paul Munnis


In my opinion the only candidate for governor to correctly diagnose our Minnesota tax crisis cause is Mark Dayton.

Whereas some will grudgingly blame the “No New Tax Policy” of the Pawlenty Administration for State atrophy, Dayton correctly diagnosis the second cause of the stranglehold on State growth, an eight year reign of tax cuts for the rich.

Tax cuts reduced State income while the no-new taxes policy assured that no growth can happen in State government.

As Republicans seek to reduce the size of government they are achieving their desired outcome thus they reject all that would cause State growth.

The GOP claim is that tax cuts for the rich will stimulate the economy but they are wrong. We have had such tax cuts since 2001 and we have nothing but a dying economy to show for it.

When an economic downturn happens then the bottom falls out of the barrel of money used for State funding. It has happened in Minnesota and a $6 Billion gap in State funding now appears between demand and supply.

This fiscal approach creates a crisis and then the crisis is further managed downwards by the use of State spending cuts.

The result has driven up property taxes, decimated our education system, and stunted our transportation systems. Yet Republicans are oddly happy – State government size is shrinking.

Since State business growth follows highway development it has in effect stunted the growth of State commercial development. Pawlenty has turned down key offers for Federal road and bridge money as well as money for citizen health programs.

When State growth is stymied then jobs become sensitive to the lack of labor market competition and job demand dries up. That freezes wages, cuts benefits, and causes more layoffs.

Income for the State shrinks, infrastructure work is stopped, even more workers are laid off, and that creates more fiscal crisis and so the State cuts aid to the Cities and that then causes local property taxes to rise and even more layoffs to ensue.

The biggest employer in Minnesota is Education and they are State supported so cutting education budgets is a part of the GOP game plan. Short the income to schools and teachers are laid off. The kids suffer with poor education but the GOP figures that’s a corporate problem for the reason for education is to create a talent pool for industry.

As this plays out then the middle class is destroyed and we end up with a two class society: rich and poor but government has been reduced.

Democrats know the game being played by the Republicans and if we want a robust economy then we must circuit break this situation. To do that then several things are needed and Mark Dayton has put them right on the table:

• End tax cuts for the rich and divert the income to schools;
  
  
• Accelerate bonding to invest in State infrastructure projects that create jobs;
  
  
• Revitalize the State Transportation sector;
  
  
• Provide tax cuts for the middle-class so as to relieve the financial pressure on individual families;
  
  
• Restore progressive taxation so that all share the tax burden.
  
  
• Seek added revenue sources for the State that are not tax based.
  

In a nutshell these are the Dayton economic proposals and he has rocked the Republicans with them; so much so that the GOP candidate – Tom Emmer – avoids offering a budget plan for his candidacy. He just offers more of the Pawlenty approach.

We are in support of Mark Dayton for his economic plan is sound, it will work and it restores prosperity to Minnesota.