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Ryan Johnson, Published April 17 2013

Group calls for tax increases in Minnesota to boost local funding

MOORHEAD – After cutting state spending by more than $5 billion over the past decade, leaders of a progressive think tank say it’s time for Minnesota to reinvest in communities.

Officials with St. Paul-based Minnesota 2020 held a news conference here Wednesday to discuss a new report it released Monday that found a $5.2 billion drop in state spending when adjusted for inflation, population growth and other factors.

Tax Policy Director Jeff Van Wychen said that drop forced local governments to pick up the shortfall. Local government aid funding was reduced by 26 percent over the past decade, while state funding for higher education fell 35 percent and property tax aids and credits were cut 43 percent.

He said Minnesota’s support for K-12 education also has dropped, with state aid to schools falling about 13 percent per pupil in the past 10 years.

Linda Pederson, a paraprofessional at Moorhead High School, said the local district has weathered the cuts only by asking voters to agree to pay more in property taxes to cover the gap. That funding, she said, has allowed the district to have smaller classrooms and more people working with students.

Still, she said, it’s hard to keep up with increasing mandates from the state, especially because they don’t come with additional funding.

“It just makes things really difficult when you have to do that,” Pederson said. “We’re required, we still have to do it, but you’ve got to do it with that same budget or a smaller budget.”

State aid to the Moorhead and Barnesville school districts was cut by about 18 percent over the past decade when adjusted for inflation, according to the study, while Dilworth-Glyndon-Felton was handed a 15 percent cut.

“They have to pay more property taxes at the same time that their school districts are often having to make reductions in their budgets,” Van Wychen said.

But he said now’s the time to reverse these trends, and that budget proposals by Gov. Mark Dayton as well as plans in the Democratic-controlled House and Senate all would seek new tax increases that would allow the state to increase funding.

Van Wychen said it might not be possible to get back to the adjusted spending of just over $4,000 per person during the 2002-2003 biennium. Per capita spending is projected to fall to $3,276 in the current biennium, according to the report.

Still, he said, it’s important to start working toward raising state revenues – especially through more progressive taxes – to make up the shortfall.

“Minnesota can afford a reasonable and progressive tax increase,” he said. “Minnesota cannot afford the perennial cycle of budget deficits and disinvestments in critical public assets such as education.”

Readers can reach Forum reporter Ryan Johnson at (701) 241-5587