Numbers Don’t Lie: Pawlenty’s Cuts Increased Property Taxes
January 15th, 2010 at 2:06 pm By Chris ShieldsYears ago, Minnesota’s state policymakers realized many public services like plowing local streets, public health services, and law enforcement could be best provided at the local level. As regressive property taxes are the primary way that communities can pay for services, it made sense for the state to share revenue and keep property taxes under control. For years that agreement worked. Minnesotans received top-notch services locally and our property taxes were kept under control. That all changed in 2003 when Minnesota’s public policy lurched in an extremely conservative direction.
Since Minnesota 2020’s launch we have consistently released research showing when Governor Tim Pawlenty and the Legislature have cut money intended for property tax relief, property taxes have gone up. Our report Minnesota Property Taxes by the Numbers: 2009 Edition most recently demonstrated this fact.
Now, an official report from Minnesota’s State Auditor shows that local reliance on property taxes grew a disturbing 102 percent from 1998 to 2008. So what do these numbers mean? First and foremost, property taxes (which aren’t based on income or level of consumption) have already gone up for working Minnesotans and seniors an estimated 25 percent since 2002. At the same time, local leaders have also made cuts, as not to increase property taxes even more so. As a result, the level and frequency of vital services like snowplowing has clearly gone down.
We know the problem, what’s the solution? Well, to put it bluntly, the state is broke. Governor Pawlenty is even ready to write Minnesota school children another IOU just to avoid asking his wealthy supporters to pay little more in taxes. We can start by taking stock in what Minnesotans need. We need job growth, world-class schools, affordable health care, tax fairness, and reliable public services like police and fire protection just to name a few.
It’s time to decide what kind of outcomes we want and commit to investing in those outcomes. Let’s find areas of the state budget that don’t produce the outcomes we want and make cuts. Let’s increase revenue with progressive taxes like income and sales instead of unfair property taxes. We get what we pay for in Minnesota, let’s remember that going forward.
Tags: Budget, property taxes, state auditor
Numbers might not lie Chris, but you sure do. A cut is not an increase. To state the opposite is a lie. There are many things Pawlenty does that I don’t agree with, but he’s not the one increasing my property taxes. Why should the wealthy pay even higher income taxes to pay for plowing, health services and law enforcement? Do they use more of those services as they become more wealthy? Why would I want to stay in or move to a state that makes me pay more for things as I use less of it? Where is the job growth in that policy? Is there a crisis in our public services that requires even more money?
Wealthier people do use more services. They have more cars so they use the roads more. Property taxes are used to fund local road networks. They tend to live on the suburban edge so they drive more miles than lower income people. Wealthier people use the airport more than less wealthy people. Wealthier people have more boats than poorer people so they use public accesses more than poorer people. Wealthier people are more likely to have their kids in sports programs so they use more publicly paid for hockey rinks and swimming pools than poorer families. Wealthy people are more likely to have funds in banks that were saved by TARP funds, but that is a federal income tax question. Wealthy families are more likely to live in communities with extremely healthy property tax base such as Eagan, Eden Prairie, Plymouth, Minnetonka and Shoreview. That commercial tax base keeps your residential property tax burden relatively low compared to communities without that tax base. In MN, the wealthy pay a lower percentage of their income for total state and local property taxes than middle income and lower income families. I am sure that you can find this documentation on the MN 2020 or Growth and Justice sites.
You can’t possibly believe that wealthy people use more government services than poor people. That’s absolutely ridiculous. “They have more cars, so they use the road more” – Can wealthy people drive more than 1 car at once? I am by no means wealthy and I bet a put a lot more miles on my car in a week than a wealthy person as I had to search far and wide for a job. Even if the wealthy did use the roads and airports more, they are paying for it with a much higher percentage of the gas and airport taxes. “Wealth people are more likely to have their kids in sports programs” — At this point you’re just making it up, and again it doesn’t matter as the sports programs pay for their own ice time and maintenance – The Eden Prairie football team doesn’t need a bailout either.
The wealthy pay far higher property taxes and far more in income/sales tax. The poor pay next to nothing and receive welfare, food stamps, healthcare, education (the wealthy are in the private schools – but also pay their taxes to support the public education system though they don’t use it). It’s not even close. It doesn’t have to be, but pushing the wealthy away from the state is no way to create jobs.
Andrew,
I just gave you example of where wealthy people use more services. Obviously, people who earn more income pay more in taxes than those who earn little. Duh!
In terms of making things up, I do not think so. The Eden Prairie High School Football team probably has a budget just somewhere south of the MN Gophers, excluding travel expenses. They probably have more players than the entire Minneapolis conference. Likely the same in hockey.
I see that you offer no solution to the funding issue. If we cannot tax the wealthy, I guess that leaves higher taxes for the middle class and lower income people.
http://www.mncn.org/bp/incid07.htm provides some documentation that the taxes are not progressive in MN. In fact, those in the highest income brackets pay less in percentage than almost any other group, except the poorest Minnesotans. This site also shows that the total cost of government in Minnesota is going down as a percentage of the state economy.
Some would say that our MN economy is going downhill due to our falling ranking in road and transportation quality, high tuition rates for students, failure to support the U of M as the primary driver of innovation in this state and a total failure of the governor to project a positive image for MN. What business would want to come here when the politicians are at war with each other and our budget is in crisis year after year after year? Pawlenty has vetoed tax bills in the last two legislature that have killed angel investment tax credits and tax credits for Thomson Reuters that would have created 1000 new jobs averaging $75,000 per year.
MN has insignificant financial incentives for business development compared to any other state, especially in the metro area.
The truth is, as MN’s tax climate has “improved” in the state rankings, our economy has declined. Others say that our regulatory climate is to blame. If that is the case, Pawlenty has been managing those departments for seven years now. If he cannot get the process to be business friendly, then maybe he should stay home and get to work rather than traveling to Iowa and New Hampshire.
You start by acknowledging the wealthy pay more in taxes. Then you start to argue that they don’t pay enough? And you are making it up with the wealthy being more involved in sports. And again a program of wealthy kids from Eden Prairie is making money for the school through ticket sales, whereas the poor kids from the minneapolis conference are supported by the taxpayers. Where’s your data that the wealthy are using more public dollars than the poor to play sports? There is no “funding issue”. If I disagree with a tax on the wealthy, why would I support a tax on the middle class? Conservatives want all taxes cut, not just the ones on the wealthy. The solution is simple: keep the money in the pockets of the people. Individuals will spend and more importantly invest, create jobs and increase productivity. Stealing from the rich, and then trying to create “green jobs” is not going to be sustainable.