Tom Scheck reports that the DFL leadership in the Minnesota Senate has finally gotten around to a proposal to close the budget deficit. The proposal borrows $1.1 billion from future payments in K-12 education aids (Governor Pawlenty had proposed $1.3 billion), makes $2.156 billion in spending cuts -- mostly through E-12 spending that could be offset by agreeing to meet requirements to receive additional stimulus bucks (as I mentioned a couple weeks ago.) As both Scheck and Andy Aplikowski note, in the past the Legislature has used the teachers' union to be an army of lobbyists for higher taxes.

And then they leave hanging out there this line

New Resources, $2.1 billion

This fools nobody: we know that means a tax increase. (Don't you DARE call it a fee!) $2.1 billion is the opening bid. $2.1 billion plus whatever Education Minne$ota ducks of the cuts mentioned. Lest you have any doubt, see Steve Perry observing the toe tag on Sen. Ann Rest's rather sensible tax bill.

Rest has touted the proposal as revenue-neutral. And that's a problem in the view of some Senate DFLers, who think Minnesota needs a revenue-neutral tax overhaul like a burning house needs a fresh coat of paint. While practically everyone respects Rest's command of the tax system, there seems to be no shortage of skepticism about the political timing of the measure. In the words of one well-placed Senate DFLer, "Our problem this year isn't pleasing the business community. It's fixing the deficit."

And fixing the deficit, and getting the economy to grow again, is to raise taxes? As observed elsewhere,
And when Minnesota has been weighted down by a high cost of doing business, where businesses pay $2.08 in taxes for every dollar of state tax expenditures that benefit them, why is our current mess a failure to keep taxes high?

Labels: DFL legislature, economics, taxes