Governor Mark Dayton’s new budget is a blueprint for fairer taxes and a brighter future for Minnesota families. His reforms pave the way for new jobs, healthier lives and a better-educated workforce. Education and health experts around the state have praised Gov. Dayton’s reforms. Future economic growth depends on these changes.
The plan puts a halt to the decade of higher classroom sizes, higher tuition and higher property taxes that put roadblocks in the path of the success of middle-class families.
None of these reforms are possible without new revenues. Asking the two percent with highest incomes to begin paying rates closer to the higher rate of taxes paid by middle class families is necessary for Minnesota to improve its future.
States with higher top income taxes perform better economically than low-tax states for two reasons. Why? The benefits outweigh the costs. These higher income tax states are better able to support business through better transit and roads, better health, better research and a better workforce. And a less regressive tax system improves the purchasing power of the middle class, helping small businesses. Growth depends heavily on consumer spending.
Here are five reasons why Gov. Dayton’s revised plan is good for families and good for business.
1. Small businesses depend on the spending power of the middle class—their customers. The plan provides tax relief to homeowners and renters and businesses—freeing up dollars to spend.
2. The plan invests $86.5 million in proven jobs initiatives that leverage nearly $1.5 billion in additional private investment. His plans in transit and highways help businesses connect with workers and transport goods efficiently.
3. Major health initiatives, principally paid by federal dollars, bring health coverage to thousands, expanding needed jobs in health care and improving employability of thousands. The improved system focuses on smarter spending and better health results to slow costs in the future.
4. Expanded pre-school and all-day kindergarten will pay major long-term dividends in the quality of the future workforce—a key to future growth
5. Investments in K-12 and higher education are reformed to deliver better results. New levels of student aid expand the opportunity to complete college.
Over the past two years, Gov. Dayton achieved major budget savings through improving government efficiency, service and costs. Before seeking new revenue, he made the changes to make sure government dollars were well spent.
Even with the modest revenue increase, his budget has a “price of government” that will be lower than the previous biennium. This may be the year Minnesota turns the ship of state around from disinvestment to reinvestment and fairer taxes. The wallets of Minnesota families will welcome it. Fulfilling these families’ dreams for their children’s future may depend on it.
Wayne Cox is executive director of Minnesota Citizens for Tax Justice.