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POLICY INSIGHT
BEYOND THE NUMBERS

Minnesota Governor’s Race a Victory for Straight Talk

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Minnesota’s too-close-to-call gubernatorial election was finally resolved this week in favor of Mark Dayton, who won by about 9,000 votes.  It marked a victory of candor over wishful thinking on how to address the state’s budget problems. Like other states, Minnesota has been besieged by the national recession.  Dayton will have a budget hole of more than $6 billion to fill in the upcoming two-year budget cycle. But unlike many other newly elected governors, who have promised to cut taxes even though their states have suffered the worst revenue collapse on record, Dayton didn’t try to sell voters on the notion that reducing taxes would magically increase revenues. Dayton has promised plenty of spending cuts.  But he didn’t pretend that cuts alone could close the gap between shrunken revenues and growing needs in a way that preserves quality of life and prepares for a solid future.  Describing taxes as “the lubricant for the machinery of democracy,” Dayton has proposed:
  • increasing income taxes on incomes above $130,000 for single filers and $150,000 for couples;
  • increasing property taxes on residences over $1 million;
  • ending the “Snowbird” tax loophole , which allows Minnesota residents to live outside the state for six months and one day of the year and pay no personal income taxes in Minnesota;
  • taxing credit card companies that charge extremely high interest rates; and
  • making it harder for corporations to avoid paying taxes on income earned in Minnesota.
It’s an ambitious plan, and legislative approval is far from certain.  But opening the discussion with straight talk — instead of a no-tax pledge that might be politically gratifying in the short term but could cause deep harm in the long run — is a bracing change from the conventional wisdom.