Minnesota Leaders Disagree If Minnesota Deserves a Tax Cut

Senate Majority Leader Tom Bakk (DFL SD-3); Speaker of the House Kurt Daudt (R-31A)
Senate Majority Leader Tom Bakk (DFL SD-3); Speaker of the House Kurt Daudt (R-31A)
Senate Majority Leader Tom Bakk (DFL SD-3); Speaker of the House Kurt Daudt (R-31A)

Last week Alpha News reported that House Speaker Kurt Daudt didn’t see a $1 billion bonding bill as “unimaginable” during a Humphrey School of Public Affairs forum with Senate Majority Leader Tom Bakk.

This week, we compare Daudt and Bakk’s views on taxes and tax reductions for Minnesotans.

Forum moderator Steve Sviggum asked both leaders to list their two or three top priorities for the upcoming legislative session.

Senator Bakk replied first, listing a balanced budget for the incoming 2017 legislature, a long term transportation plan and a “family sick leave-type policy” as his top priorities.  Speaker Daudt’s top priorities were “significant tax relief for Minnesotans” and a long term transportation plan.

Sviggum asked Senator Bakk if the House and the Senate might be able to come to some agreement on tax reductions this year.  Bakk’s response was that would be pretty difficult; he’d like to get a tax bill done – “there’s hundreds of pages of things that are worth doing in there that don’t cost money.”  Instead of the legislature reducing individual taxes, he said he’d like to “put some money into local government aid and for cities and counties…” because holding down property tax impacts “is probably a better goal than cutting taxes for a whole lot of people who probably don’t need the reduction…”

Although Bakk stated early in the forum that he’d like to get property tax relief to local communities, later, during a discussion about funding transit projects, he compares property and sales taxes, saying, “Everybody hates property taxes and favors sales taxes because somehow sales taxes are considered to be ‘discretionary’…but don’t we love property taxes when we go to see our accountant and get our income taxes done and we find out its a deduction?!”

Bakk also believes that this year’s $1.8 billion surplus is actually “relatively small,” so decreasing taxes could potentially put Minnesota into a deficit-induced crisis down the road, and warned that a tax bill cutting taxes would make this upcoming session, “pretty short.”

 

Speaker Daudt disagreed with Bakk, stating, “If you don’t want to reduce taxes, then those same arguments are there not to increase spending. If you spend the money, it’s the same as decreasing the taxes – either one has sent us into a deficit…it is not the revenue that has caused the deficit…it’s actually the spending that’s causing the deficit and the inability for the legislature…to say ‘no’…”

 

Daudt also said, “We are collecting more than we need from Minnesotans…we, in the last budget, increased state spending by about 5% – the biennium before, when Democrats were in complete control, they increased spending in the general fund by about 12%…if you look at the curve of state spending, it’s gone up consistently…”

Daudt also admitted that the budget the legislature passed last year, “serves Minnesotans…it’s a little higher than I would have liked, but that’s the art of compromise…”

mn state historical gen fund spending
3 Minute Budget Brief” Minnesota Management & Budget

 

 

 

 

 

 

 

 

 

 

 

 

The Minnesota Legislature will convene on March 8, 2016.

 

Video clips from Uptake: Humphrey School for Public Affairs Legislative Session Preview with Bakk and Daudt. Click here for full video.