Minn. Subsidy Recipients Press for Higher Taxes

Published November 1, 2006

“We can afford to pay more state taxes. And we can’t afford not to.”

That was the headline on an ad that greeted thousands of Minnesotans in June when a group calling itself Works For Me MN partnered with the self-described “progressive” think tank Growth & Justice to make a pitch for a $2 billion hike to the state’s income tax.

The two groups call their campaign Invest for Real Prosperity. Cynics might say a better name would be Invest for Us.

Some of the ad signers–including Carl Pohlad, who owns the Minnesota Twins baseball franchise–have received millions of dollars in state subsidies.

Huge Stadium Subsidy

In May, Minnesota lawmakers gave Hennepin County, where the Twins are located, authority to raise the sales tax without a voter referendum. The Hennepin County Board on August 29 used the state’s authority to approve a .15 percent sales tax hike (3 cents of every $20 spent).

The hike is expected to generate nearly $400 million in taxpayer funds over the next 30 years for Pohlad’s stadium. (See “Minn. Twins Win Stadium Subsidy Deal,” July 1, 2006, Budget & Tax News.)

David Strom, president of the Taxpayers League of Minnesota, said an income tax hike won’t come without a fight.

“There simply is no groundswell for raising taxes in Minnesota. Despite efforts by Growth & Justice to build momentum for their proposal, only a few hundred of the state’s five million residents have signed on to their petition,” Strom said.

“Even the DFL’s [Democractic-Farmer-Labor Party] likely candidate for governor, state Attorney General Mike Hatch, won’t go on the record saying he’ll raise taxes,” Strom noted.

‘Zero Likelihood’

State Rep. Phil Krinkie (R-Lino Lakes), who serves as chairman of the state House Taxes Committee, agreed. “Zero. That’s the likelihood of a $2 billion tax increase coming out of the 2007 legislative session.”

Gov. Tim Pawlenty (R), who presided over a legislature that turned a $4.5 billion deficit in January 2003 into a $1 billion surplus by February 2006, was quick to offer an outlet for those, like the ad co-signers, who believe they aren’t paying their fair share.

“I invite the people on the list to send in a voluntary contribution to the state, of $250,000 to $2 million each,” Pawlenty said in a press statement in response to the ad.

“I will also personally pose with each of them for a commemorative photo in the Governor’s Reception Room accepting their contribution and issue them a certificate of appreciation,” Pawlenty said. “I look forward to the state receiving checks from each of these 203 individuals.”

Big Spending Proposals

Of course no commemorative photos have been released, but neither that nor the lack of public legislative support has diminished the plans of the Invest for Real Prosperity group.

Topping their legislative agenda are funding increases for:

  • early childhood education programs for all Minnesota 3- and 4-year-olds;
  • health insurance for every child whose family income is less than $60,000 per year;
  • construction of a complete metro-area light rail transit network for Minneapolis;
  • programs to allow more elderly people and those with disabilities to remain in their homes; and
  • subsidizing college tuition so more Minnesotans can earn post-secondary degrees.

A big hurdle facing any proposal to increase taxes is the state’s historically high state and local tax burden.

According to the Minnesota Taxpayers Association, a nonpartisan tax research group, in 2004 Minnesota had the 16th highest tax burden in the United States. That’s down from fifth highest in 1997.

Mark Giga ([email protected]) is director of outreach at the Taxpayers League of Minnesota.