Paul Hoffinger, my view: Push for lower taxes has hurt 'the good life in Minnesota'

Years of scaling back public investment to lower taxes and attract businesses has had an impact on ordinary Minnesotans and the services we value.

Last update: November 3, 2009 - 4:25 PM

Some of us who are old enough recall a Time magazine cover back in the late '70s. It pictured Gov. Wendell Anderson relaxing in a plaid, flannel shirt on a lakeshore holding a struggling, prize walleye aloft. The caption -- "The good life in Minnesota" --was to become synonymous with Minnesota in the public mind. We've been trying to live up to that image for 30-some years now, and it's been an effort. Some would say it's an effort worth making.

The magazine went on to describe a place where the people were genteel and educated, and where "Minnesota nice" had allowed opposing parties to cooperate for the betterment of the next generation (who we know are all above-average) by creating a well-funded education system.

The trouble with that image is that we were a state that was paying for that rosy future with higher income taxes than many other states. Some business advocates scored with the voters by pointing out how inefficient government is, how money collected in central, big-government offices shrank by the time it reached people like you and me, with each layer of administration taking a large chunk off the initially healthy pot of money.

So Minnesotans, led by some from the south metro area, set about the project of reducing business taxes and lowering Minnesota's standing as an expensive place to conduct business in hopes of attracting more businesses and jobs. The project was successful, and our state's ranking fell regarding high business taxes, and we presumably became more "business-friendly." Unfortunately, a tax incidence study by the Minnesota Department of Revenue showed lower-income Minnesotans paying a larger share of their income in taxes than upper-income folks, and still our unemployment figures are right up there with most other states.

Our increased investment in both K-12 and higher education is still not enough to reduce large class sizes and the cost of college is still going through the roof, along with our property taxes. Salaries and wages are static or falling, for those who have jobs. The only dependable factor seems to be the rise of health insurance premiums, housing foreclosures and personal bankruptcies. Somehow, something went wrong in paradise.

People with rural backgrounds may have heard the phrase "priming the pump." It refers to the effort it takes to get water up to the level of a hand-powered pump, before we can pump out some water. I'm suggesting we have skipped priming the pump of a state budget which served us well in days past. Corporations and wealthy individuals may have found our state tax structure less burdensome, and businesses' bottom lines may have improved, yet the benefits to Minnesotans have been "skewed," to use a polite word.

If we want to avoid falling bridges, burgeoning classes, jammed highways and long unemployment lines, I suggest there are some basic steps we need to take again. The fundamentals of government 101 require that we invest greater state funding in proven high-return projects like education and efficient transportation. Researchers at the Minneapolis Federal Reserve agree with that assessment. Former state finance commissioners concur.

The choice is ours. Now it's up to us.

Paul Hoffinger is an Eagan resident.

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