A better idea may surface [UPDATED]Published 10:09am Thursday, March 14, 2013 Updated 12:11pm Thursday, March 14, 2013
Gov. Mark Dayton deserves credit for reversing course on his plan to extend Minnesota’s sales tax to almost every product and service imaginable. The plan, which may have sounded like a good idea at one point, was clearly unworkable because it would have added more than $2 billion in taxes on businesses and almost certainly have cost Minnesota jobs. We’re glad the governor recognized this.
Now it’s time for a more realistic plan that focuses first on the state’s spending priorities and known revenues, then looks at the possibility of tax increases.
While a government is not a household or a business, it in some ways should operate with the same restrictions. Wise households and businesses understand their spending priorities and make a plan to live within their means, then increase revenues to the extent that they are able.
Minnesota’s state government should follow that example by creating a spending budget that carefully prioritizes state government functions and then, figuratively speaking, draws a line at the point where the cost of those functions equals expected revenues.
Any spending “below the line” would not continue. This fresh look at the state’s priorities would be difficult and controversial because it would, we hope, properly position K-12 education, pre-school education, public transportation and safety atop the pyramid, perhaps at the expense of other programs.
It would also put an end to the non-stop growth of, and tinkering with, a budget edifice that has not been significantly revised in many decades. It would be a fresh start. It may be that expected revenues would not match the minimum in necessary spending and, if that was the case, then it would be time to consider tax increases.
It was clear from the moment that the governor’s original tax plan was announced that nothing like this process had taken place, and that many of those who were actively advocating for the plan had little or no understanding of its economic impact. What we suggest is a plan that would build from the ground up so that consequences of decisions could be fully understood. The result would be a better state government and a supportable tax burden.