Americans for Tax Reform (ATR) President Grover Norquist issued a statement today calling on Minnesota Democrats to back down from their multiple tax hike proposals. After Minnesota Management and Budget Commissioner Jim Schowalter released a new budget forecast that saw revenue up and the deficit down, the doomsday calls for higher taxes are no longer justified.
Schowalter now projects a budget deficit of $627 million for fiscal years 2014-15, down from the previous projection of $1.1 billion. The current fiscal year will actually end with a surplus of $295 million. Because Gov. Mark Dayton had used the $1.1 billion shortfall as a justification for income, sales, and tobacco tax hikes, Norquist argued that lawmakers should deal with this more manageable deficit in a way that allows it to be wiped out by economic growth and less government spending, rather than delaying Minnesota’s recovery with higher taxes.
“Minnesota is already on the path to a balanced budget without harmful tax hikes,” Norquist said. “Today’s revelation that the budget hole has fallen by almost half takes away the tax-and-spend crowd’s argument that tax increases are necessary. In fact, by raising taxes on Minnesota families and small businesses, politicians are in danger of reversing the tide of economic growth and positioning the state for larger deficits down the road.
“Gov. Dayton’s tax increases – nearly $3.5 billion worth – dwarf the budget deficit. The governor’s true goal is increasing the size of government on the backs of taxpayers. An income tax rate of 9.85 percent is fiercely uncompetitive and will cause small businesses to leave the state for greener pastures. A larger sales tax burden will hit struggling families hard. And a tobacco tax increase will only push commerce across state lines, hurting retailers and government coffers simultaneously.
“Minnesota lawmakers can and should manage this smaller budget deficit without tax hikes. To do otherwise would hamper the fragile progress that is already underway.”