Governor Dayton recently handed the Minnesota Legislature his proposed budget for the upcoming two-year budget cycle. It’s safe to say that the budget that will be approved in the House in the coming months will not bear a close resemblance to this plan.
To the governor’s credit, he always provides his ideas first and likely adds many extra initiatives knowing he’ll have to compromise at some point and decide later what his true budget priorities are. It’s also good for us to know what he’s thinking, and for us to scrutinize his proposals in our committees.
With this budget, it’s clear he’s thinking of increasing both taxes and the size of government.
His $45.8 billion budget for Fiscal Year 2018-19 represents a nearly ten percent increase over the $41.5 billion in our current budget. Minnesota also currently shows a $1.4 billion surplus, yet Governor Dayton would like $1.5 billion in new taxes and fees over the next two years alone by increases in the gas tax, tab fees, the Metro area sales tax, new license/title surcharges, and more. He also wants a $1.4 billion tax increase on trips to the doctor by extending the provider tax, otherwise known as the sick tax.
Right now the average person doesn’t have extreme optimism on how much the economy is improving. Ten percent growth in state government, when the experts say the economy is growing at about two percent, is beyond extreme.
In my opinion, the state legislature needs to lead by presenting a budget that maintains fiscal responsibility while staying within the boundaries of our anticipated growth. I am confident House leadership will do exactly that. Minnesotans know we don't need billions in higher taxes while our state has a $1.4 billion surplus, but what they do need is tax relief.
It’s worth noting we are very early in the process, and we will utilize the most up-to-date economic forecast before moving forward with a budget outline. The governor has provided a starting point and I thank him for putting a plan on paper and delivering it to us, but it’s much more than we’ll end up spending at session’s end.