To: Governor Tim Pawlenty
Margaret Anderson Kelliher, Speaker, Minnesota House of Representatives
Larry Pogemiller, Majority Leader, Minnesota Senate
It is traditional each April that I write to the Internal Revenue Service to suggest needed reforms in our federal tax scheme. Needless to say, those letters go unanswered.
So this letter represents a change of strategy. After all, the real problem behind rising and ever-more-complex tax schemes is increased spending. Let’s start at the state level first.
Minnesota’s budget woes are a microcosm of those at the federal level and luckily, Minnesota’s are not quite as bad as California’s. The most recent estimates are that this state’s budget has a “gap” of at least $1.2 billion for this year, and for the next biennium, a gap in excess of $5 billion. Given that all of you are running for other offices or considering doing so, action from you to raise taxes or cut programs isn’t very likely to occur.
But the budget can, which has been kicked down the road so often in the past 10 years, is now the size of a Waste Management garbage truck. Kicking it in the fender won’t move it very much.
Camels are said to be horses designed by committees. Our state budget is starting to resemble a multihumped camel. The usual dodges of shifting K–12 education payments into the next fiscal year, raiding every conceivable trust fund or reserve fund within state borders, and cutting aid to local governments (thereby forcing local taxes to go up in a subsequent tax year) have all been exhausted.
Structural reform—which could mean such things as eliminating the corporate income tax, broadening the sales tax, and simplifying the state income tax—is a nonstarter in an election year when all of you will likely be running. (Note: We’re not sure what Lieutenant Governor Carol Molnau will be doing, because it seems that she has been taken to a secure and undisclosed location.)