Tim Penny: ‘No tax’ scheme has run out of gas
06/20/2005
Tim Penny
Star Tribune
Published June 17, 2005
Quack, quack, quack. This week in a clever advertising campaign, a national anti-tax organization is attacking Gov. Tim Pawlenty for breaking his “no tax” pledge.
Critical of the governor’s attempt to define his 75 cent cigarette tax as a fee, the ad essentially asserts that if it quacks like a duck it’s a duck, and if it acts like a tax it’s a tax.
There is a problem with Pawlenty’s proposed cigarette tax, but it is not that he broke his pledge.
To the contrary, the problem is that the governor’s pledge was phony from the start.
Despite his rhetoric about Minnesota’s budget shortfall being a “spending problem, not a revenue problem,” Pawlenty has never been leery of proposing revenue increases.
Just look at the many ways he has sought revenue to fill the gap in his budget.
• He has borrowed and spent the billion dollar tobacco endowment.
• He has shifted roughly $1 billion in state payments to local governments from one fiscal year to the next. This gimmick does not eliminate the expense; it simply allows the state to make one year’s budget look smaller by delaying those payments to the next year.
• He has increased various fees and fines (on everything from professional licenses to college tuition to traffic tickets) to the tune of a billion dollars or more.
• He has proposed that school districts increase their property tax levy (without a referendum) in order to meet his school funding promises.
• He has trimmed the rolls of those eligible for MinnesotaCare health insurance (and is pushing for further reductions in eligibility) as a way of freeing up the so-called “sick tax” for general fund purposes—even though during his gubernatorial campaign he pledged to repeal this tax entirely.
• He unsuccessfully sought expansion of gambling in order to generate $300 million for the state budget.
There is a common theme to the revenues in the governor’s budgets: They are either revenues that can’t be labeled a tax or revenues for which he can’t be directly blamed. But now the governor has finally proposed a revenue source that his anti-tax allies can’t swallow.
Pawlenty continues to insist that his tobacco proposal is not a tax. He calls it a “health impact fee.” He argues that it is optional because people can choose to smoke or not. He asserts that, like a fee, the “benefits or costs are borne by those affected” (the benefits evidently being that a higher cost will deter smoking).
But, by his definition, a gas tax could also be called a fee. After all, a gas tax is optional in that for many motorists there are alternatives to driving. And certainly the benefits of the gas tax (better roads) are directly related to the tax.
Yet, the governor vetoed a gas tax increase just days before he proposed a “health impact fee.” The governor seems to believe that only he can define what is a tax and what is not a tax.
However, even Pawlenty’s definitions do not remain consistent. Like his anti-tax allies, he used to call the tobacco tax a tax. For example, earlier this year, when legislators offered a cigarette tax increase, he spoke out against it. He called it regressive and indicated that he would not accept the idea unless it was revenue neutral (in other words offset by other tax cuts).
Now Pawlenty has apparently experienced a change of heart. He desperately needs the new tobacco money to fill a hole in the budget caused by the defeat of his casino gambling plan. Unfortunately for the governor, unlike his earlier revenue proposals, this one looks, acts and quacks like a tax.
Accordingly, his anti-tax allies have had enough—and they’re finally holding him accountable for abandoning his no tax pledge.
Pawlenty is attempting to play this to political advantage by suggesting that he is simply trying to provide leadership in order to break the budget impasse. But a real leader would not have misled us for so long about the need for both revenue increases and spending cuts to balance our state’s budget. And a real leader would quit parsing words and admit that a tax is a tax.
Tim Penny, is a former member of the U.S. House of Representatives and a former Independence Party candidate for governor.