Monday Invest in MN rally as legislature, governor head for budget and tax showdown

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The 2009 session of the Minnesota legislature faces a May 18 deadline to adjourn: between now and then, lawmakers must craft a budget that addresses a $6.4 billion deficit for 2010-11 and adopt a tax bill that pays for it.
The Minnesota AFL-CIO is helping lead a coalition of labor, faith-based groups and nonprofits — the Invest in Minnesota Coalition — to organize a grassroots lobbying effort to urge adoption of a budget that meets the state’s vital needs.

Invest in Minnesota also is advocating that revenue-raising must be a significant part of the solution to resolving the state’s budget deficit — and that the package of revenue solutions must make the tax system more fair.

With support from labor, Invest in Minnesota has been advertising in print, on the web, and on television and radio to get its message across.

“We need to go back to a fair and balanced approach to taxes,” said Jennifer Schaubach, legislative director for the Minnesota AFL-CIO. “We really have to let the public know what happens if the governor gets his way,” she added.

Critics detail how the Governor Tim Pawlenty’s proposed budget would lead to draconian cuts in state programs, deep reductions in state aid to cities and counties, and massive increases in local property taxes.

The solution, according to the Invest in Minnesota campaign, is a balanced approach that moderates budget cuts by raising new revenues fairly, based on ability to pay.

Invest in Minnesota plans a rally Monday, May 11, at noon at the Capitol rotunda to send a message to the governor and lawmakers.

“The rally May 11 is to say, ‘listen, everybody needs to pay their fair share,’” Schaubach said. “We need to get as many people there as possible.”

Following the rally, Invest in Minnesota plans additional actions from 1-3:30 p.m. to bring legislators the coalition’s message.

Schaubach also urged visiting the coalition website — www.investinmn.org — to send a message to legislators.

The budget crisis this year is not new —only worse. Under Pawlenty, the state has faced persistent budget deficits. Former state finance commissioners have told the Legislature that these are structural deficits resulting from inadequate tax revenues.

“The governor has prevented the Legislature from enacting permanent new revenues that would set us on a sound footing,” said Wayne Cox, executive director of Citizens for Tax Justice, a labor-backed policy group.

Pawlenty has met constitutional requirements for balancing the budget by using one-time funds, raiding long-term endowments, and accounting shifts.

“It’s kind of like paying off today’s expenses over 20 years,” Cox said. “It just makes the matter worse.”

Picture the college student who gets a credit card, runs up a huge balance, and will spend many years paying off the pizza and beer tab from his college years.

Both the Minnesota House and Senate have proposed tax plans to increase revenues, in part, by setting new tax rates that ask the state’s wealthiest citizens to pay their fair share of taxes. The House version would raise taxes on joint filers whose income is greater than $300,000 per year. The Senate version would establish a new tax rate for joint filers whose income is greater than $250,000 (restoring tax rates from the late 1990s).

Proponents of raising taxes on the wealthiest Minnesotans point to the “Tax Incidence Study” released in March by the Minnesota Revenue Department. When all state taxes are taken into account — income tax, property tax, sales tax — the study found, low- and moderate-income Minnesotans are paying a higher percentage of their income in taxes than upper-income Minnesotans.

For more information:
Invest In Minnesota Coalition, www.investinmn.org
Minnesota Budget Project, www.mncn.org/bp/

Steve Share edits the Labor Review, the official publication of the Minneapolis Regional Labor Federation. Learn more at www.minneapolisunions.org

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