The struggle in St. Paul over how to balance the state budget and cover a $4.6 billion deficit is building to an epic climax, a naked clash of conservative and liberal philosophies clearly and vividly illustrating the differences in the way they view government and the world in general. The basic question is: When hard times come along, should the taxpayers pay an increased share of their diminished income to cover the cost of government, or should government slim down, and find cost-savings and efficiencies as people must do in the private sector?
The DFL controlled legislature wants the taxpayers to step up, proposing a host of tax increases, among them a new 9% income tax bracket (among the highest in the nation), elimination of the deductions for mortgage interest, property taxes, and charitable contributions, (there’s that greasy government hand in the church collection plate), and of course, a big increase in the “sin taxes” on smoking and drinking. There will be no sunset provision on any of these exactions, you may be sure.
Minnesotans are lucky to have Governor Tim Pawlenty standing between them and the Mongol horde in the Legislature, a man willing to stand on the principles that government must live within its means, limit itself to the functions that it alone can do best, and cannot grow like a cancer. (Isn’t that so, Governor?) Had George Bush clung more nearly to these precepts, the GOP caucus in Washington would not be the ragtag band of survivors it is today.
Pawlenty points out that Minnesota’s tax regime is already uncompetitive with the rest of the nation, and that adding to the burden will surely chase business and the most productive out of the state, reducing the increasingly heavily taxed base quickly to the point of diminishing returns. He might also point out that government wastes money more profligately, hires more unnecessary people, and runs useless and duplicative programs far beyond what any private business can afford to, and therefore should be the first to seek economies.
To instead give it more money every time a recession comes along, is to encourage it always to behave less responsibly, blindly seek growth, and never search out economies, prioritize, or question the need for what it is doing. Worse yet, when the economy improves, the public sector legions will now have brand new sources of income with which to create yet unheard of programs and bureaucracies, all of which will quickly ossify into bone which can’t be cut when the next downturn arrives. And this will necessitate a fresh round of tax increases all, of course, to be paid by the rich.
The Governor’s plan to finance the deficit by borrowing against the ongoing yearly payments from the state tobacco lawsuit settlement (stolen money to begin with, from companies conducting a lawful business) is a brilliant stroke. It will have the wholesome effect of not only getting us through the recession without new taxes, but will remove the tobacco funds from a place where his friends and colleagues in the Legislature can lay hands on them so as to invest in new, undreamt of mischief.