Thursday, June 23, 2011


As we head into the final days before a state government shutdown, there will be increased proposals for settlement and more speculation on what will likely transpire.  The June 22nd Star Tribune contained an interesting editorial essentially suggesting that the healthcare provider tax be increased and that this increase be regarded as a surcharge and not labeled a tax increase thereby saving face for legislative Republicans.   Ultimately, this surcharge would produce some $600 million in new revenue which would come from state providers and the federal government.  The benefit would not only be the additional money but, more importantly, the preservation of MinnesotaCare and keeping some 85,000 to 140,000 people on the insured rolls.  Further, it would prevent thousands more from being disenrolled from Medicaid.  Overall, it is a huge step forward.

However, relative to the overall settlement it still leaves the Republicans and the Governor approximately $1 billion apart.

In terms of politics, the editorial is disturbing.   Allowing disagreements to be settled in a way that saves face is as American as baseball and the hotdog.  But saving face is considerably different than the perpetuation of a fundamental untruth.

It has to be said once and for all that a variety of taxes were increased under Governor Pawlenty and no amount of camouflage can mask that realty.  As a matter of fact his “borrowing” of some $400 million from the health care access fund has helped precipitate this crisis.

 In addition, the current Republican budget proposals contain some $400 million in property tax increases ( on top of a variety of other cost increases.  It should also be noted that Republican legislators (Sen. Julie Rosen-Fairmont and Rep. Morrie Lanning-Moorhead) are the authors of legislation to provide public funding for the building of a Vikings stadium in Ramsey County.  This increase in the sales tax in Ramsey is a tax increase just as Pawlenty’s support for a Twins stadium was a tax increase in Hennepin County.

It should also be remembered that when oil company executives testified in Congress against the removal of public subsidies for oil, many Republican leaders declared that any withdrawal of subsidy funding would constitute a tax increase.  If that is to be the case, then what about the thousands of Minnesotans thrown out of healthcare and told to go on “vouchers” to pay for policies that are beyond the financial reach of low-income people?   Is that not a tax increase?  How about the student losing state support from institutions of higher learning and having to pay higher tuition?  And what about the rest of us who will pay higher healthcare premiums to accommodate the costs of the uninsured receiving emergency care?  One must also add to this list of growing tax increases the likely wage losses that would be suffered by public and private sector employees who are laid off as a result of the shutdown.

Frankly, this debate could use a lot more honesty and far less propaganda.  The bottom line is that both budget proposals contain revenue enhancements or tax increases.   It is not a question of labeling, it is a question of who pays and how

1 comment:

  1. IMHO Governor Pawlenty abdicated his responsibility as Financial Leader of the State. His tenure is marked by more style than substance, and a clear lack of Leadership.


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