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Editorial: Cheapskating our way to greatness

Lower taxes fail to bring jobs or growth to Minnesota.

Last update: June 13, 2007 - 5:56 PM

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WHERE WE STAND

Examples of state and local taxes as a percentage of personal income, 2005:

• Highest: 1. Wyoming; 2. New York; 3. District of Columbia; 4. Hawaii; 5. Maine. • Lowest: 47. Colorado; 48. Alabama; 49. Tennessee; 50. New Hampshire; 51. South Dakota. • Minnesota's neigborhood: 21. Indiana; 22. Arkansas; 23. Minnesota; 24. Arizona; 25. Pennsylvania.

Sources: Minnesota Taxpayers Association, U.S. Census Bureau.

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News that Minnesotans have dropped from 16th place to 23rd in the amount of state and local taxes we pay as a percentage of our personal incomes, and that our state has fallen from 28th to 31st place in state and local government spending, was greeted with fanfare this week by the governor's office. Not only was this "good news for taxpayers," Tim Pawlenty said, but a signal to those wanting to grow jobs in Minnesota that "we're open for business."

Well, yes. It's nice to feel our comparative tax burden losing some weight, and to anticipate that industry, now duly informed, will deliver the stream of high-quality jobs we've been expecting since our slim-down phase began.

And so we're waiting. Eagerly waiting. Because job growth has been dismal since the tax-and-spend diet began eight years ago with the tax cuts of the late 1990s to the point that now, for the first time on record, Minnesota's unemployment rate for May exceeded the national average, and its rate of job participation fell to the lowest level since the early 1990s. That's not all. Last week brought the not-so-cheery news that Minnesota's economy grew at a sluggish 2.9 percent in 2006, lagging the nation's growth for the second straight year and dropping the real growth of our gross domestic product to 30th among the states.

As President Bush might say, "Heckuva job."

Under Pawlenty's guidance, the state seems headed rapidly from exceptional to below average. Minnesota does stand "open for business," as the governor suggests. But the invitation should read: "Come! Take advantage of our traffic jams, our crumbling roads, our inadequate transit system. Come experience our declining, high-disparity graduation rates. (Only 43 percent of blacks and 65 percent of Asians graduate from high school -- among the lowest rates in the nation.) Come witness our declining per-person investment in higher education, our scant support for bioscience technology, our problems in attracting talented students, our untrimmed parks and littered roadsides, our rising rates of disorder and hopelessness, our underfunded and outmanned police forces. Come notice the palpable decline in a quality of life that we once shared together but now reserve for those with means to enjoy it on their private patios."

Minnesota is fast adopting the winner-take-all format of the national economy and social structure. It's a format in which the poor don't really get poorer, but fall further behind everyone else, especially the jet-propelled top 1 percent, who now control a whopping 19 percent of the national income. This, apparently, is the "balance" so attractive to job production. And so we wait eagerly.

Actually, this page preferred the old formula: Minnesota as a commonwealth, a place where nearly everyone swam or sank together. The state was a bit pricier. But it competed on the basis of quality. And it worked: During the higher-tax 1980s and '90s, Minnesota routinely outperformed the nation on job creation and income growth. Sadly, that Minnesota is fading from memory. So, until the jobs roll in and prosperity returns, we'll side with St. Louis Park Mayor Jeff Jacobs who, on a related matter, said of the governor, "I personally just don't get it, the notion that you are going to cheapskate yourself into greatness."

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