Posted: 04/13/13 12:38, Edited: 04/24/13 15:28
by Dave Mindeman
Anybody who thought that having a Democratic majority in both the House and Senate in Minnesota, would make the budget process a cakewalk.... didn't understand the issues involved.
It is one thing to have a party like the GOP just say NO to everything....that's easy, but it is a different story when you actually have real ideas to bring to the table.
The Governor had an outstanding comprehensive reform plan that he introduced early on. It met with a lot of resistance...which was expected. But he backed off quickly....much too soon in my opinion. I wish he would have fought for it or at least moved on portions of the legislation that had a clear path.
The House and Senate have been left to either accept the new, scaled back Governor's version or move ahead with their own ideas. They have been doing the latter....which I think is fine. It looks like the Party is in disagreement, but this is how it is supposed to look when you are working toward coalescing competing ideas.
Republicans should really try that sometime. This ousting the non- believers isn't working so great.
But let's get back to the budget.
I have some doubts about the House side's argument about the income tax surcharge on top of the added tiered income rate. The surcharge is OK but it looks more like just another gimmick and not a permanent structural solution. And believe me, a lot of us are tired of the gimmickry.
Granted this "gimmick" is meant to fix another "gimmick" -- namely the school shift -- but the campaign rhetoric during the next election cycle, that is sure to follow the increased taxes, is probably not worth it. The school shift is on track to be paid and if we get the promised increases in permanent funding that seem to be evolving, the delay will be tolerable. Most of the school districts seem to be in favor of that as well.
The Health and Human Services budget target (reductions) in the House is troubling but I assume it is not written in stone. At least they are keeping an eye on our most vulnerable citizens (a nice contrast to Pawlenty's unallotment of General Assistance Medical Care).
But let's talk about the Senate proposals. Frankly, I like the approach they are taking, although I would like to see some tweaking.
The Senate Tax Committee has come back to sales tax reform. They have left out the more controversial aspect - the Business to Business Service task - and brought in other services.
I do wish they were not discussing a clothing tax. The Dayton proposal on clothing above $100 might have worked but a full tax on clothing is something Minnesota has been able to avoid over the years and it would be nice to continue that. I would imagine that the clothing tax expansion is the main reason for the overall rate reduction proposal to 6.0% -- but maybe if we keep the other parts of the proposal and pull out clothing, we can still reduce it but by a lesser amount.
Broadening the sales tax to services is really very important. The trend line for the future is all about a service economy and if we do not get our tax structure involved in that, the structural problems will never be fixed.
I find it a little strange that the Governor's office and the House have quickly dismissed the Senate proposal. I don't know if that means they are against the package as a whole or just some of the parts, but I think it at least warrants some negotiation. After all, none of the 3 competing proposals fix everything.
It seems to me that we need a hybrid that takes the best parts of all of them....and if we did, I believe there is a chance for solid reform.