Tax reform must be at the top of the list for action when the Minnesota Legislature convenes.
It certainly won’t be an easy issue to tackle, but for the good of the state it must be handled to ensure that cities continue to receive the local government aid they need to provide services to citizens.
Tax reform must also play a role in breaking the deficit-surplus cycle. Minnesota has seen eight budget deficits in the last 11 years. Now, the state projects a $1.1 billion biennial deficit and a $2.4 billion deficit to school districts, which resulted when the state “borrowed” money from the education fund to help solve the last deficit.
As International Falls City Councilor Cynthia Jaksa told The Journal last week, the state’s reliance on property taxes must be decreased and more revenue must be generated from other sources. Among those sources are collecting sales tax due on sales via the Internet. Jaksa said that could bring an additional $300 million to $400 million — about 2 percent of the state’s biennial budget — into the state’s coffers. And she said Department of Revenue Commissioner Myron Frans is considering expanding the sales tax to additional items and dropping the rate. Frans has also discussed ending some deductions on income taxes, which she said would bring in an additional $28 billion.
We, like Jaksa, believe that a balance approach must be taken that would combine reducing reliance on property taxes and finding additional revenue to fill the gap through tax reform.
And, as Jaksa noted, rural legislators, like our newly elected Sen. Tom Bakk and Rep. David Dill, must convince their colleagues that finding more money for programs like LGA and reducing reliance on property taxes would benefit all of Minnesota.
