A Return to Fiscal Sanity in Minnesota

When it comes to Tax Burden Minnesota has been rated the 8th highest state in the nation at a combined rate of 9.41%, according to Wallet Hub. All the higher rated states are on the east coast and Hawaii, and surprisingly Minnesota even “beat” out Illinois and California. 

This calculation is based on three tax types of state tax burdens — property, individual income, and sales and excise taxes — as a share of total personal income. To download the complete report click here.  

Earlier this year Minnesota reported an expected record surplus in revenue (in other words taxes over-paid by Minnesotans), finally landing at $17.5 billion. The Legislature has used most of that money already, for a combination of spending increases, one-time projects and tax “cuts” when it set the current budget, which took effect in July. 

As the session ended the surplus is expected to still be $2.4 billion going into the next biennium; final numbers will be released next February.  In the final throes of the session, the Legislature passed massive increases to the next budget’s spending, to a whopping $72 billion – up from $56 billion in the last two-year period – a 28% increase!  

Even the much-heralded new allocations for education from the surplus seems to be intentionally shortsighted. Most of the new spending is mandated for long term plans, but only funded for these next two years. It includes unemployment payments to part time employees during the summer, substitutes for up to 24 weeks of paid family/medical leave, lowering of retirement age for teachers, and 60+ additional mandates. Every school district will be faced with their own budget deficits due to these mandates in 2026 – unless the state increases taxes yet again.  

A 28% increase in taxes, on top of inflation rates of 7.4% Sept 2021-22 and an additional 2.4% since this time last year*, plus skyrocketing interest rates, plus a new payroll tax to be imposed on employees to pay for the new state-run sick leave policy, will substantially increase the stress on families’ own budgets.  

What decisions will you be forced to make to keep up with Minnesota’s insatiable appetite to tax and spend?  

I believe you know best how to budget and spend your own hard-earned wages, not a legislative body divorced from the reality of the huge burden it imposes on taxpayers. Hard decisions must be bravely made to reign in state spending.