GET THE FACTS ON TAXES!
by Peter P. Bozanich

1. FACT: Unfair tax burdens hurt families
2. FACT: Minnesota's sales tax is among the highest in the nation
3. FACT: A 28-cent hike in the gas tax would make Minnesota #1
4. FACT: K-12 Education is not being shortchanged
5. FACT: High taxes hurt our quality of life
6. FACT: Minnesota liberals want to spend your money -- not theirs
7. FACT: Government is now our biggest employer
8. FACT: State employees are not underpaid
9. FACT: State employees get better fringe benefits
10. FACT: We can change!
11. Just say no


What’s the biggest employer where YOU live? Well, if you live in Minnesota, it’s the government.

FACT: UNFAIR TAX BURDENS HURT FAMILIES

State & Local Tax Burden
Per Capita 2008
RANK
 STATE  AMOUNT
1
 Connecticut  $7,007
2
 New Jersey  $6,610
3
 New York  $6,419
4
 Maryland  $5,669
5
 Massachusetts  $5,377
6
 California  $5,028
7
 Hawaii  $4,920
8
 Minnesota  $4,688
9
 Virginia  $4,669
10
 Rhode Island  $4,533
17
 Wisconsin  $4,194
   U.S. Average  $3,984
26
 Michigan  $3,694
30
 North Dakota  $3,637
31
 Iowa  $3,589
47
 South Dakota  $3,079
 Source: Tax Foundation
 

Latest figures from the nonpartisan Tax Foundation reveal that Minnesota ranks #8 in state and local taxes. Minnesotans pay 18% more than the rest of the nation in taxes.

For a family of four, that means you have to come up with an extra $2,816 every year in state taxes than the average American family. That is a staggering burden on Minnesota families. Every year, you are asked to pay $2,816 more than your fellow citizens in other states. It means you have to work harder, work longer hours, have less time to relax, have less time to spend with your kids.

That also means that government in Minnesota gets the largest portion of the average family paycheck. Minnesotans today pay more on taxes than they do on food, clothing, and housing combined.

Only a handful of high cost (mostly northeastern) states exceed Minnesota’s cost of government.

How much is enough?


 
Small Business Survival
Index 2007
RANK
 STATE  AMOUNT
50
 New Jersey  79.231
49
 California  77.985
48
 Rhode Island  75.604
47
 Maine  74.222
44
 New York  73.189
45
 Minnesota  72.096
41
 Iowa  69.161
33
 Wisconsin  60.183
   U.S. Average  58.108
20
 North Dakota  54.795
6
 Michigan  46.073
1
 South Dakota  25.914
Source: Small Business & Entrepeneurship Council
Index ranks from friendliest to least friendly policy environment for entrepeneurship.
 

If you are thinking of starting a business, you'd be smart to avoid Minnesota. Thanks to our high tax burden, Minnesota now ranks 45th in business climate for small business.

When a DFL legislator says "time to raise taxes", what they are really saying is "goodbye jobs".


In just five short years (from 2003 to 2008), the state budget grew from $22.6 billion in 2003 to $27.8 billion in 2008. That’s more than a 23% increase.

Did your income go up 23%?

Look at the chart on your right. Every 10 years, the state budget roughly doubles in size.Think about this: In 1963, Minnesota taxed its citizens about $800 each. By 2033, however, the projected cost just for the crime of living and working in Minnesota will be more than $28,000 -- per taxpayer! How much is enough?

 

Minnesota's State Budget

 
General Fund
All Funds
1963
$338,401,000
$639,070.000
1968
$684,088,000
$1,278,395.000
1973
$1,509,403,000
$2,452,688.000
1978
$2,966,946,000
$4,502,157.000
1983
$3,727,672,000
$5,558,266.000
1988
$5,547,108,000
$8,716,032.000
1993
$7,325,972,000
$11,573,140.000
1998
$10,212,246,000
$15,738,264.000
2003
$13,894,158,000
$22,572,928.000
2008
$17,214,416,000
$27,816,988,000
Source: MN Dept of Finance

FACT: MINNESOTA'S SALES TAX IS AMONG THE HIGHEST IN THE NATION
 

Like every other tax over the years, Minnesota's state sales tax has crept upward. Today it is 6.5%.

Lately, it has become the favorite target for liberals looking for available revenue sources. On January 1, 2007, a 0.15% Twins stadium tax began to transfer dollars from Minnesota families to the family of Carl Pohlad, one of the 10 wealthiest families in the United States.

DFL leaders are passed a 0.375% increase to help fund the arts (who apparently also cannot exist on current money). Hennepin County is also requesting an ADDITIONAL 0.5% hike to bail out the failing Hiawatha Light Rail project.

 

History of Minnesota's Sales Tax

August 1967
3.0%
November 1971
4.0%
July 1981
5.0%
January 1983
6.0%
July 1991
6.5%
November 2008
6.9%
Source: MN House of Representatives
 
States with the Highest Sales Taxes
RANK
 STATE  RATE
1
 Mississippi  7.0%
2
 New Jersey  7.0%
3
 Rhode Island  7.0%
4
 Tennessee  7.0% (state income tax limited to dividends and interest only)
5
 Minnesota  6.5%
6
 Nevada  6.5% (no state income tax)
7
 Washington  6.5% (no state income tax)
Source: MN House of Representatives
 

Up, up, up we go!

With the new Twins stadium tax, Minneapolis now has a local sales tax rate of 7.15%. With the proposed 0.5% Light Rail Tax and the proposed 0.375% Arts Tax, the sales tax would reach a business killing 8.025%


FACT: A 28-CENT HIKE IN THE GAS TAX WOULD MAKE MINNESOTA #1
 

Think you're paying too much for gas already? The DFL thinks you pay way too little.

The DFL wants to hike your gas taxes 28 cents per gallon!

If the tax hike is adopted, the state taxes you pay at the pump will more than double and Minnesotans will pay the #1 highest gas tax in the nation!

 
State Gas Tax if Minnesota
imposes an additional
28-cent per gallon tax
RANK
 STATE  CENTS/GAL
1
 Minnesota  48.0
2
 New York  38.7
3
 Washington  34.0
4
 Wisconsin  32.9
5
 Pennsylvania  32.3
15
 South Dakota  24.0
20
 North Dakota  23.0
23
 Iowa  22.0
   U.S. Average  21.5
30
 Michigan  19.9
 Source: Tax Foundation (December 2006 statistics)

FACT: K-12 EDUCATION IS NOT BEING SHORTCHANGED

Editorials and letters from educators are full of accusations that Governor Pawlenty and the Republicans are somehow defunding education and putting Minnesota's children at risk. It is a popular issue for demagogues on the left.

"K-12 education is being cut!," they declare. When asked for proof, they often cite anecdotal evidence -- a teacher was let go here, a program was eliminated there.

Consider this plank on the state DFL platform:

[We will] use state budget surpluses to pay back the money borrowed from the public schools and use other budget surpluses for funding education.

So what are the facts? Is education really being cut?

The fact is that K-12 education is the fastest growing item in the state budget. It has been in the past and will continue to be so going into the future. In fact, since 1980, no state has increased funding of K-12 education as rapidly as Minnesota has.

Fastest growing items in the State Budget
Biennial Budgets from 1998 - 2007
 
1998-99 
2000-01 
2002-03 

2004-05 

2006-07
(forecast) 

Pct Change 
1998-2007 
 K-12 Education
$7,596,780,000 
$8,916,349,000 
$11,001,736,000 
$13,256,799,000 
$14,676,363,000 
+93.2% 
 Health and Human Services
$10,831,568,000 
$12,506,536,000 
$15,187,677,000 
$16,862,313,000 
$18,461,244,000 
+70.4% 
 Local Government Subsidies
$2,274,060,000 
$2,889,021,000 
$3,358,285,000 
$2,796,505,000 
$3,012,547,000 
+32.5% 
 Transportation
$3,926,052,000 
$4,620,793,000 
$4,802,575,000 
$4,838,081,000 
$4,901,610,000 
+24.8% 
 Environment, Agriculture,
 and Econ Development
$2,256,681,000 
$2,547,372,000 
$2,389,933,000 
$2,675,548,000 
$2,774,111,000 
+22.9% 
 Higher Education
$2,542,382,000 
$2,748,303,000 
$2,784,536,000 
$2,600,395,000 
$2,822,943,000 
+11.0% 
 State Government
$893,693,000 
$889,688,000 
$929,612,000 
$818,953,000 
$755,444,000 
-15.5% 
 Other
$2,223,736,000 
$2,235,192,000 
$2,314.886,000 
$3,292,548,000 
$3,513,540,000 
+58.0% 
Source: Minnesota Department of Finance, Consolidated Fund Statements

Apparently we now define a 93% increase as a cut. Hopefully these aren't math teachers.

As Joe Soucheray pointed out in a recent column, we may have problems in Minnesota K-12 education, but lack of money isn't one of them.

"Half this state's budget every year is spent on public education. We are talking about billions and billions and billions of dollars here, folks. That's enough money, especially when you cannot produce any evidence that links money spent to academic achievement. We might have a parent problem. We might have an inattentive student body problem. We might have an inattentive student body problem due to inattentive parents. We don't have a money problem....anybody want to bet me that a good audit would certainly say a thing or two about what we are paying for?" -- Joe Soucheray, St. Paul Pioneer Press, 02-11-04

FACT: HIGH TAXES HURT OUR QUALITY OF LIFE

You’ve heard it all before: “Sure we pay incredibly high taxes in Minnesota, but look at our great quality of life!” They will tell you that high taxes are part of the price of living here, just like the cold weather and mosquitoes.

But this is beginning to change. Our highway systems are suffering from years of misplaced priorities and neglect. The school standards had to be scrapped after years of poor performance. And Minnesota continues to be a magnet for welfare recipients in search of a free ride.

No one is saying that ALL government expenditures are bad or that government can't do good things. But runaway government spending can and does damage our quality of life.

As government spending increases, jobs leave. Studies show that high taxes can actually stifle economic growth. Higher tax states tend to have slower economic growth than lower tax states. As government’s appetite for your income grows, that means less money for you, your family, your community, your church.

FACT: MINNESOTA LIBERALS WANT TO SPEND YOUR MONEY, NOT THEIRS!

Minnesota has the sixth highest tax burden because Minnesotans are such generous people, right? Well, guess again. According to the 2005 Catalogue for Philanthropy, Minnesota only ranks 44th in personal charity.

Whenever the big spenders talk about all the great things they want to do with your money (remember it's for the children), they always come off as such caring, generous, loving people. The reality is: Liberals force you to donate to causes that they themselves refuse to support.

It's easy to be generous.... when you're spending other people's money.

FACT: GOVERNMENT IS NOW THE BIGGEST EMPLOYER

According to a study by the Taxpayer's League of Minnesota, government employment has risen twice as fast as the general population in the past 20 years. In that time, we’ve added 120,000 new government jobs. That’s more than the populations of Saint Cloud, Mankato, Albert Lea, and Detroit Lakes combined!

Government Employement in Minnesota
since 1982
 
June 1992
June 2002
% Change
Federal Government
 30,518 
33,009 
8.2% 
State Government
52,247 
68,542 
31.2% 
County & Local Gov’t
175,806 
255,024 
45.1% 
Total Government
258,571 
356,575 
37.9% 
State Population
4,131,450 
5,019,720 
21.5% 
Source:MN Dept. of Economic Security (Covered employment and wages); U.S.Census Bureau

Sadly, Target is now the only for-profit employer in the top five:

Top Employers in Minnesota 30 Years Ago... ...and Today.

1. Honeywell
2. 3M
3. General Mills
4. Pillsbury
5. Control Data

1. State Government
2. Mayo Foundation
3. Federal Government
4. Target Corporation
5.
University of Minnesota

Source: Corporate Report Fact Book Source: Twin Cities Book of Business

Government has replaced the private sector and now is the LARGEST EMPLOYER in the state. In the past 20 years, government employment has grown at twice the level of population.

As government grows, private sector jobs - the jobs that pay the taxes to pay for all this government expansion - are disappearing. That means fewer and fewer taxpayers are left to pay for bigger and bigger government.

Employment Growth (2000 - 2002)
Private Sector:
State and Local Government:
-48,183
+23,438

One out of six Minnesotans now work for the federal, state, county or local government.

FACT: STATE EMPLOYEES ARE NOT UNDERPAID

The Taxpayer's League of Minnesota also came out with an interesting report on state workers a year ago. Here is a basic summary of their findings:

Three years ago, Minnesota’s public employees went on strike for the first time in 20 years led by the two largest unions, AFSCME and MAPE. The issue? A $5 co-pay on medical expenses and demands for a 21% wage and benefits increase.
 

Private vs. State Employee Wage Growth

The average state employee makes 22% more than the average Minnesotan.

  2000 2001 2002 Increase
State Employee
$41,890
$43,585
$46,384
+ 11%
Private Sector
$35,534
$36,978
$37,960
+7%
Source: The Minnesota Workforce CenterFigures calculated from average weekly wages for 2002

Average Salaries in Other States

State workers are paid more in Minnesota than in any of the surrounding states.

RANK
 Public  Sector  Private  Sector
New York
 $46,270  $47,659
Minnesota
 $43,526  $36,778
Michigan
 $41,390  $37,556
Wisconsin
 $39,657  $31,180
U.S. Average
 $37,814  $36,157
North Dakota  $30,011  $25,324
 Source: Bureau of Labor Statistics
  The strike was settled with public employees getting a 7% increase with modest co-pays on their medical expenses.

In spite of that, the rhetoric from the state employee unions would have you believe that state workers are subsisting on low wages and are being bled dry over health care costs.

Not true.

The average state employee makes 22% more than the average Minnesotan. Moreover, in the past three years, wages for state employees have grown almost twice as fast as wages in the private sector.

Salaries for government workers are larger than those for private sector workers ($44,000 compared with $37,000).

 

Health Insurance Premiums
Private vs. Public Sector

The state pays 68 percent more for health care coverage than the average private business.

 
Annual 
Employee 
Contribution 
Annual 
Employer 
Contribution 
SINGLE
   
   Private
$372 
$2,145 
   Public
 $0 
 $3,600 
FAMILY
 
 
   Private
 $1,572 
 $4,223 
   Public
$708 
$6,375 
 Source: Department of Employee Relations, Employment Policy Foundation

FACT: STATE EMPLOYEES GET BETTER FRINGE BENEFITS

Currently most state employees have 100% of their monthly insurance premium paid by the state. In addition, they receive total family coverage for a modest $59 more per month no matter how many dependents they have - less than half of what the average private sector worker pays.

PAID TIME OFF
Private vs. Public Sector

State employees get 25% more time off per year.

  Private Sector State Employees
 Vacation
18   24 
 Holidays
 11 
 Sick Leave
11   13 
 TOTAL
38  48 
 Source: Bureau of Labor Statistics
  Many state employees also work a lot less hours than the average Minnesotan. The average state employee gets nearly 10 weeks off per year (including paid holidays).

Finally, state workers receive a generous “defined benefit retirement plan -- a guaranteed pension that comes with annual cost of living adjustments. As a result, the average age of retirement has dropped to 60.2.

In contrast, most private sector employees have moved to “defined contribution” pension plans that do not guarantee a specific annual retirement salary and do not include annual cost of living adjustments.

Their salaries are better, their hours are better, and their benefits are better. By almost any measure, the state employees are living very well off the taxpayers.

The picture is clear: public service is by and large not a sacrifice; it is, as one Taxpayers League publication calls it, "A Pretty Good Deal."

FACT: WE CAN CHANGE!

Runaway government at all levels is costing you. It costs jobs, it hurts our way of life, it threatens the financial security of Minnesota families, and it isn’t fair when compared to other states.

Can we afford NOT to change?

Here are just a few ways that you can help turn the tide.

(1) Get involved. In a democracy, you are the government. The SD42 Republican website has all kinds of great ideas on ways you can help us defeat the tax and spend Democrats.

(2) Get informed. The Taxpayer’s League of Minnesota has a lot of great information about Minnesota taxes. The Eden Prairie Taxpayer's Alliance has information on how taxes are going up in Eden Prairie. You can also find a number of other useful resources at our useful links page.

(3) Support fiscally conservative candidates and organizations.

(4) Urge your elected officials to support The Taxpayer's Bill of Rights -- an amendment to the Minnesota Constitution that will limit growth in government spending to population growth and adjusted inflation.

(5) Fight back. If you see editorials in the local papers or slanted news stories on TV touting the virtues of runaway government spending, write them, call them, don't let misinformation go unchallenged. If your elected officials start bragging about how they are going to spend YOUR money, speak up -- let them know how you feel. If you won't speak up, then who will?


JUST SAY NO

Governor Pawlenty was once asked to name the most difficult part of his job. He replied: “Saying no”. He said that he has to say no to different groups and lobbyists and organizations on a daily basis. And, as any responsible parent will tell you, it’s painfully difficult to constantly say “no”.

Every day your elected representatives come under tremendous pressure to spend your money. The groups who benefit from government spending are well funded and very well organized. While you relax tonight with your family, someone is working on your legislators to get them to spend more. You see them at protests, public meetings, at the capitol, and in organized letter writing campaigns. And the local news media is almost exclusively on the side of the big spenders.

But you now have the facts. So get involved….get informed….and help elect people who have the backbone to just say....“no”.

 

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