For standing up for taxpayers in a hard-fought budget battle, Minnesota State Rep. Phil Krinkie (R-Lino Lakes) was named “Hero of the Taxpayer” by Americans for Tax Reform, a national taxpayer advocacy group in Washington, DC.
Despite Krinkie’s efforts, Minnesota taxpayers will see their taxes go up, most noticeably on cigarettes and other tobacco products. On July 13, lawmakers passed what they dubbed “health impact fees”: a 75 cents per pack increase in the state’s cigarette tax (taking the tax to $1.23 per pack) and a doubling of the wholesale tax for cigars, snuff, and other tobacco products (resulting in a 70 percent surcharge).
Gov. Tim Pawlenty (R) maintained, “some people call it a tax, some call it a fee, I call it a solution.” Krinkie strongly begged to differ.
“I don’t believe anyone in the state of Minnesota, outside the governor’s office, does not believe this health impact fee is really a tax,” said Krinkie after passage of the tax increase.
Earlier, on the House floor, he stated, “I won’t vote for a bill that has deception in the heart and essence of the bill.” He cast his vote against the Health and Human Services Bill, which included the tax increases.
Principles Compel Resignation
Krinkie’s strong beliefs and principled stance on taxes not only led him to vote against the cigarette tax increase, but also to resign as chairman of the House Working Group on Taxes.
In a July 7 letter to House Speaker Steve Sviggum (R-Kenyon), Krinkie wrote he could no longer be effective as the chairman of the conference committee because he strongly disagreed with the governor’s cigarette tax increase proposal.
The Saint Paul Pioneer Press on July 8 quoted Krinkie as asking, “How far are you expected to stray from your principles in order to support the governor and the speaker?” He added, “My point is I can no longer support their positions.”
Governor Blindsided Him
After six weeks of failure to pass finance bills and a continuing resolution, and after a partial government shutdown because of that failure, Krinkie was called into Pawlenty’s office. Krinkie said the governor explained all of his previous offers were off the table, including the cigarette tax, and that he would put the 10 conference committee members in charge of coming up with a total revenue figure.
Krinkie accepted, and the committee worked through the July 4 weekend.
Then, seven days later and without warning, the governor came back and put an offer on the table that included both the cigarette tax and additional gambling revenue.
Said Krinkie, “At this point I realized the governor was going to not include me in the negotiation process, that he was going to reverse course to when he said all his previous offers were off the table, and put not only one, but two offers back on the table. It was at that point that I said I am not going to be able to support the governor’s position nor the position of the speaker.”
Could Have Cut Taxes
Krinkie admitted it was not easy to resign from the conference committee’s work.
“After endeavoring for six months to put together and pass a bill, which we did, that actually would reduce the tax burden for over a million taxpayers in Minnesota, having to step back from it, letting go of it, was very difficult,” he said. “Like the goalkeeper who lets the winning goal in, you feel as though you have not succeeded in helping out the team–and I felt almost ill.”
However, he was no longer able to carry water for the governor, whom Krinkie said had disappointed and shocked him for three reasons: because he gave no notice of his intentions to come out with a tax-hike proposal; because he was violating his no-new-taxes pledge; and because there was no “quid pro quo.”
“You’ve got to make the kids eat their broccoli before they get dessert,” he said. “Anything that could have been used to persuade members to modify their positions would have been helpful at the end of the session.”
Sandra Fabry ([email protected]) is state government affairs manager for Americans for Tax Reform.