Minnesota Faces A Crossroads

As the July 1 deadline for approving a new state budget draws closer, Minnesotans are witnessing first hand the problems created by a deeply polarized society. 

Never before in our state’s history have we been so evenly divided on the fundamental principles that underlie our public policies. Our evenly divided public opinion is underscored by two statewide election recounts in the last two statewide general elections.

Over the next three days, Governor Dayton and our legislative leaders will be making decisions that will have profound impacts on our quality of life.

The decisions they make will determine whether Minnesota continues its path toward lower taxes and substantial reductions in public services, or provides a balanced approach to eliminate our deficit—a balance that includes budget reductions and increased revenue. The future direction of our state really does hang in the balance.

The struggle to pass a balanced budget is far more than an exercise in mathematics and accounting. Behind the numbers are strong differences of opinion on the role of government and how best to pay for the services government provides. 

Governor Dayton believes government, and the services it provides, are an essential component of a successful society. State and local governments provide a broad array of services that not only protect and care for our most vulnerable citizens; those services also help assure the continued prosperity of our state. 

After World War II, Minnesota established a proud history of investing in quality public services that helped propel our state to one of national prominence. That tradition continued through the 1980s. By 1990, Minnesota ranked seventh in the nation for total state and local tax collections per $1,000 of personal income. 

A review of statistical data from 1990 demonstrates the public investments made by our parents served our state well.  In 1990, Minnesota ranked fifth best in the nation for controlling infectious diseases. Our annual unemployment rate was 17th lowest in the country. Minnesota’s 91 percent high school graduation rate gave us the enviable top ranking among the 50 states. 

Overall, Minnesota ranked second best in the nation on a wide variety of criteria measuring the health of our state. The 31 Fortune 500 companies that called Minnesota home demonstrated the economic competitiveness of our high tax state.

Over the past two decades, Minnesota leaders have reduced our total state and local tax burden.  Minnesota state and local tax collections per $1,000 of personal income dropped from seventh place among the 50 states in 1990 to 19th in 2007.

While many citizens view our lower tax climate as a positive, Minnesota appeared to pay a price for its reduced investment in quality public services.

By 2010, Minnesota’s rank in the number of infectious diseases had slipped to 15th best in the nation. The annual unemployment rate had increased, placing Minnesota 21st lowest among the 50 states. Minnesota’s high school graduation rate fell to 82 percent, ranking seventh best in the nation. Minnesota’s overall ranking slipped to sixth best in the nation on a wide variety of criteria rating the health of our state. Our lower relative tax burdens did not appear to have a positive impact on our economic competitiveness. In 2010, the number of Fortune 500 companies that called Minnesota home had fallen to 21.

As Governor Dayton and our legislative leaders debate the state’s budget for the next two years, we should all be asking ourselves if holding the line on any additional revenue is worth the price of a continued reduction in our quality of life.

Minnesota’s National Rank Among The 50 States, 1990 - Present

Selected Criteria

Criteria

1990 National Rank

Most Recent Rank

State and Local Taxes Per $1000 Income

7th

19th

Number of Infectious Diseases Per 100,000 Residents

5th

15th

Lowest Annual Unemployment Rate

17th

21st

High School Graduation Rate

1st

7th

Overall Health Of Our State, Composite of 26 Individual Criteria

2nd

6th

Actual Number of Fortune 500 Companies Headquartered In Minnesota

31

21