State Economist Tom Stinson … told the Legislative Advisory Commission on Tuesday, the $1 billion income tax increase that the Democratic-controlled Legislature passed and Pawlenty vetoed in May would have cost the state an estimated 1,000 jobs over the next two years.
Oh, wait, I’m sorry — I left out a small portion of Stinson’s remarks. Here’s the whole thing.
State Economist Tom Stinson estimates the spending cuts Gov. Tim Pawlenty will start making [June 30th] will cost Minnesota 3,300 to 4,700 jobs.
By contrast, Stinson told the Legislative Advisory Commission on Tuesday, the $1 billion income tax increase that the Democratic-controlled Legislature passed and Pawlenty vetoed in May would have cost the state an estimated 1,000 jobs over the next two years [emphasis added].
Good work, conservatives! Now our state’s fiscal health is disastrous, but at least we were able to save lose 4 times as many jobs.
Nice Try.
The job losses are coming from cities, counties, and state agencies. These people would have been employed by the dollars taken out of your and my income. These are not jobs that will leave to go elsewhere, not jobs that add anything to Minnesota’s pie. Just jobs that take a dollar that was already here and shift it around a little bit.
I fully recognize that to one of those state agency workers who will lose their job, this is serious. I don’t mean to sound callous to them.
At the state level, it is a wash. If we need to use increased tax dollars to artificially prop up our employment figures, we’re not really solving any problems.
Why don’t these jobs add anything to the pie? The workers are paid and spend real money, which (gasp!) creates other jobs. You are so blinded by your right-wing ideology that you can’t even follow simple math.
1 private sector job = 4 public sector jobs?
Fail
Wow, yeah. They get free housing, food, enjoyment? Money is circular, “artificially” inflating a balloon is still inflating a balloon. They get money, they spend money. It’s not only jobs that are lost, but support infrastructures for these people(from coffee shops, to grocery stores, to cell phone companise) lose out on income as well, causing more jobs to be lost.
Further, the justification for Pawlenty’s veto of hiking the income tax and instead slashing spending was to alleviate the burden of all taxpayers in the hard economic times. I don’t believe he or anyone else claimed fewer jobs would be lost in the process.
“These are not jobs that will leave to go elsewhere, not jobs that add anything to Minnesota’s pie.”
Exactly how do you come to this “wisdom?” Could you explain this a little further? Why is it that a government job does not add anything to Minnesota’s economic pie? That makes no sense at all even beyond the effect of salary multipliers from purchasing needed goods and services. I think that a state civil engineer organizing bid requirements or even architectural regulations is adding to our safety much like a cop or fireman. People doing public health research and analysis seem to be keeping Minnesota out of the poisoned food sweepstakes going on in southern food plants. Aren’t agricultural extension agents working with farmers useful?
You said it now prove it… or is mindless Republican drivel above rational thought?
@amuseinc - These “lost” jobs were a net draw on the economy. You cannot meaningfully measure the “salary multiplier” of a job that is subsidized through a tax on the economy. Those jobs exist at the expense of private sector employment. Come on, this is a simple idea to grasp.
Its not a simple idea to grasp because its absolutely false. Those jobs aren’t a net draw on the economy, but cutting them is.
So in other words a cop in Minneapolis who buys a house, hires a plumber, goes up north to a cabin for a fishing trip is actually a drain on the economy of Minnesota? The fireman who works running into danger when everybody else is running away from it is just another example of government welfare in your view of things? A vocational teacher who graduates a class of expert auto mechanics every couple of years is not making Minnesota a stronger economic entity because he is working for a government agency instead of a private for profit school?
Want to try explaining that simple idea again because it sure sounds like some weird lie concocted by a very stupid ideologue. How are each of these examples “at the expense of private sector employment” and not a benefit to the state. Are you suggesting we only have for profit cops and firemen? Strikes me that you want to have the Mafia in charge of public safety. “It sure would be a pity if that nice house of yours burned up. Want to sign up for some… insurance.”
There you go again.
Why do so many lefties on here only look at the “what we get” side of the equation? That equation is only complete when you look at the other half of it, which is “what we pay”. Yes, we get alot for our tax dollar. I value good schools, roads and transit, public safety, etc.
But I can only look at what I receive intelligently if I, at the same time, look at what it is costing.
Like T-Paw, I can’t justify cranking up tax rates — taking a larger piece of a finite pie — to fund government operations when those whom the money would be required of are on equally shaky footing right now.
We can all agree that it is nice to get things. But that is only looking at half of this complex equation.
Alright you’re taking my argument to an illogical extreme. The role of government is to first and foremost protect the rights and safety of its citizens, so cops, firefighters, prison workers, district attorneys, a capable national guard, and so on are all examples of expenses that the government must make in order to fulfill its duties to the people. Entitlement programs on the other hand are non-essential and outside of the State’s core service requirements. Perhaps my argument as originally stated was a bit incomplete. My point is that there comes a point with regards to the size and scope of government where you stop receiving benefit for the tax dollars being collected. In other words there comes a point where a dollar collected in taxes is simply a dollar wasted, rather than a dollar that provides some sort of useful and/or necessary public service. My argument is that we reached that point long ago, and the current budget cuts are ones that will help return our governemnt to more efficient use of our money. Now if your local government takes their LGA cut from the state and immediately starts firing its cops and firefighters before looking at cutting non-essential services you may want to ask them where their priorities are. In either case we cannot afford to continue to grow the size and cost of government to the tune of $1 Billion when the tax base is shrinking in a recession.
Shorter Chad… I got nothing. How is your simple concept to be grasped when you take both sides of the argument as true. You start your argument with “Those jobs exist at the expense of private sector employment” and end it with “Entitlement programs on the other hand are non-essential and outside of the State’s core service requirements.” At no point do you prove either statement. Now exactly who is defining an “entitlement” program and who is defining something as “non-essential?” You or those idiot libertarians who think that having a government agency to regulate medical devices, food or the stock market are a waste. You are just unhappy that the government spends tax dollars on something you personally don’t have a stake in. Well join the party Chad, I’m not happy seeing tax dollars spent overseas to prop up brutal fascists or poured down corporate welfare ratholes with no-bid contracts.
And Dan when you can show me a more efficient method of asking a for profit organization to handle the functions of government, with the understanding that the business can not cherry-pick its’ tasks, I might think you have a point. As is you are just parroting the Republican Party line without a single rational other than a mathematical formula. You are right, it is complex, certainly more complex than you phrase it. If it was that simple why do you support the wealthy paying a smaller percentage of income tax than the Middle Class?
How about this amuseinc, you want to know “who is defining an “entitlement” program and who is defining something as “non-essential?”… Your governor just did! And in so doing he saved us Billions. I would think you could show some gratitude toward the man for making the tough decisions that you and your ilk didn’t have the mental capacity to make. Margaret Thatcher said it best “the problem with socialism is that eventually you run out of other people’s money”. Well you just ran out of other people’s money, so feel free to pony up if you want to save your favorite spending program.
Too bad the voters now associate all bad economic activity with Democrats.
Um…they don’t.
DTM, your logic is fatally flawed. These are jobs that have been around and should be around but since our state’s revenue has taken a steep decline (as every other states), then raising taxes is merely replacing the loss revenue. This isnt artifically propping up jobs that shouldnt exist in the first place, this is officially propping up jobs that should still exist but may not because the economy took a nose dive and every state in the country doesnt have enough revenue to continue hiring these people.
These jobs have been getting paid for out of our pockets since they were created, raising taxes is ensuring those jobs still exist and is keeping those people employed. Your logic leads to why we shouldnt raise taxes to create jobs (that is artificial), the real question is if we should raise taxes to keep jobs that already exist.
I read that the DFL’s budget included $1 Billion in additional taxes. Is that correct? If all of this complaining comes down to Pawlenty costing the state 4,700 government jobs and the DFL only costing us 1,000 jobs, isn’t $1 Billion a lot of money to spend in the name of saving 3,700 jobs? What am I missing here?
What you are missing is that not all state spending goes into employee salaries and benefits. And, of course, that the jobs aren’t the only justification for supporting the DFL plan. The point here was simply that Pawlenty’s job “saving” justification for cutting spending is a total joke.
Oh, and those state employees that were seperated are now, by law, eligible for unemployment benefits. Which are your tax dollars again, Dan. Only now, they are not providing the citizens of MN with any services for such tax dollars.
Zing.
LOL.
Great. So we’ve gotten ourselves to a place where we have to choose between the lesser of two evils. Not ironically, in both cases, the “evils” involve taxing our citizens and giving the money to someone else.
Unemployment benefits have been around for decades. Its nothing new, and hardly an innovation in policy.
Don’t piss your pants in excitement the first time in a decade an economist says something a democrat likes to hear. The funny part is he talked for how many hours and you only found a few sentences you like? Pathetic. Put up the whole text for people to put in context. Governor Pawlenty wants to create an economy to save jobs and create job growth. Governor Pawlenty wants to save our jobs from moving to lower taxed states and try to attract more business as well. “Saving” jobs is something the Obama fans should be familiar with. How many jobs do we save by jacking the small businesses with tax hikes? Oh that’s right they close, lay-off people, or never even get started. How many middle income homes do we need to replace the revenue taken from a top tier tax payer? I recall it is over 500. What the DFL simply does not get is they need to quit trying to get another golden egg out of the goose before it leave the state.
Its not too hard to find an economist who likes Democratic economic ideas because unlike Republican economic ideas, they actually work. Pawlenty’s brand of Republican economics is a proven failure.
How so?
Pawlenty, like a lot of Republicans, operates under the assumption that cutting taxes is the best way to stimulate the economy. The reality, though, is that the best way to stimulate the economy is not to cut taxes, but to invest in education and infrastructure. The “race to the bottom” is only going to bring in bottom-worthy jobs.
Back under the bridge, troll!
DPYP — you shouldn’t comment from work, particularly if it’s for the state.
Sean
There is a theory that says anyone working for the government is a worthless lazy slob doing nothing of value, and anyone working for a private business is obviously contributing something of great value to our community, doubly so if they are the American ideal of the rugged self-employed individualist. It also usually extends to the idea that the income produced by the job proves how much it is worth. By this theory Bernie Madoff is worth a bit more than 100,000 police and firefighters. Free Bernie Madoff, the American Conservative Hero.
Pawlenty wants to aspire to an office for which his medocrity makes him ill-suited. The idea that he cares one whit about the quality of life for Minnesotans his almost hilarious.
Only his banality makes him a viable option in the current GOP pack. The concept of talent in GOP leadership left the building a long, long time ago.
(The following has no real basis in the science of economics but is just a personal observation. I just don’t see a lot of people looking to make Minnesota look like Alabama as a good thing.)
I keep hearing this “Gospel” about businesses and “Rich” people leaving the state because of high taxes. I have not seen this happen with anything but liquid investment dollars and those seem to be going overseas not to South Dakota. Exactly how is this measured and who is doing the accounting? Seems to me that if you have a business that is making money in Minnesota, you are trying to decrease costs, increase sales and profits. If your taxes are such a major concern within that business, doesn’t it mean you are not paying enough attention to the actual business. A dime of business costs that is tax deductible at some level isn’t what is hurting your bottom-line.
Every wealthy person I ever met has a tax consultant, a CPA and a financial advisor working to decrease their tax liability and increase their return on investment. It is not exactly like these helpless “Rich” people are getting taken to the cleaners by the taxman. In fact some of these people are more than honest to tell you they will spend more on keeping their taxes down than the money they save on those taxes. Some even have mentioned that when they go to Miami they need to live in a gated community but in Minnesota just live in a nice neighborhood.
I’m not in favor of “soaking the rich” but I am in favor of them paying a rational amount in comparison to everybody else. That is not happening at present by just the sheer percentage analysis between the Middle Class and them. Concurrently if you make your money from a business that uses Minnesota’s famous skilled labor force, should you not carry some responsibility for making sure that the educated workers keep on coming. We used to be a high service state with a higher tax rate than some of our surrounding states. It was worth it to most Minnesotans.
Perhaps one of the funniest aspects of this are the people most often being tax whiners are not the wealthy of Wayzata but rather the Middle and Lower economic classes of Nordeast. I don’t see a lot of Buffy and Chip types at the Teabag Tax rallies. I see lots of Ralph and Edna making sure that an inheritance tax for people leaving more than a million dollars doesn’t get enacted. These people will never see a bankbook with more than 5 zeros in it yet are incensed that those who will have to pay taxes.
Very true.
Why is it that those on the left, who so quickly see the administrative costs of healthcare as the culprit for runaway costs and waste, can’t understand the same concept when it comes to the admnistrative costs of running a State?
Because the people on the left base their arguments on facts and aren’t blinded by right-wing ideology like you. The administrative costs in government pales in comparison to the waste in the health care system.
Because we’re long past the part where we are trimming the budget; the cuts that are being implemented are compromising the integrity of state functions. That’s why.
Why does it take a higher % of our states GDP to operate the same government? I’m not talking about absolute dollars — of course that will need to increase with inflation.
But why is a bigger chunk of the pie needed today than 10, 20 or 30 years ago?
The biggest reason it takes a bigger chunk is the cost of health insurance.
NorthernMNer - Would the integrity of state functions include a new practice facility for the MN wild or $500,000 on fountains in Minneapolis? Have you seen how these clowns are spending your money?
Actually, it would include public k-12 schools not having to take out loans (with interest) to pay their bills. (Thanks to those super-awesome accounting shifts.) It would include public health agencies being able to do their jobs properly. You know, those quaint ideas.
That doesn’t answer my question.
I’ve never gotten a good answer to this question, although Dan’s healthcare answer is a start. If it used to take 8% of Minnesota’s GDP to run government, why should it take 9% or 10% now? And are the services or goods that used to receive the other 92% going to be damaged by receiving only 90%?
All at a time when our federal government burden, per capita, is increasing (long-term)?
Why is it that per capita spending on public education can increase at 3 times the rate of inflation yet we still can’t ask them produce a better product? Where does the money pit end? I do not accept the argument that we must blindly fund underperforming schools without some sort of expectation of an improvement in quality. K-12 must learn to do be better stewards of our money.
Dtm,
One example: 20 years ago, before the age of the intertubes, governments didn’t have to budget for building, enhancing and maintaining a website. They also didh’t have a cell phone budget. As technology improves, so do the costs of supporting it.
I have an amuseinc “personal observation” (above) about this too:
It seems that when it comes to taxes, republicans and conservatives (and some moderates) generally make a blanket assumption that the tax revenue is being wasted. It’s as if, when presented with a request for a tax increase, they say, “My tax money is being wasted. If you want more, prove me wrong.”
Taking a school district property tax increase proposal as an example, the district has townhall meetings, to attempt to explain the need for the increase. But most of the district residents don’t go. Even if they did, the focus of the meeting is on a new revenue, not the existing ones, which are what the residents are ticked off about.
The point I’m making is that constituents want full justification for taxes spoon-fed to them. They won’t take their own time and do their own research, they expect the district to come to them. The districts try to do this: They put out information in the local papers, they start phone banks to get to the residents directly, They put up lawn signs. In short, they put on a political campaign.
Where do they get the money for this? Tax revenue. That’s one reason why they need more: To convince lazy assholes who won’t do their own investigating, to vote for their proposal. In the end, some of those people will STILL vote against it.
You want accountability? Then accept the fact that if you don’t have the time to do it yourself, accountability needs funding, like anything else.
Pete -
You might be misplacing your anger. You’re talking to a guy who voted for the sales tax amendment (I favor funding thing through sales tax) and has voted for every local school board referendum that I can recall. The more local the money is being spent, the better I feel about its impact and its transparency. My gripe is largely with the black hole of federal government and the slightly smaller black hole of state government.
I still don’t buy that our governments need a larger slice of the pie (there I go again) to operate than they used to. Sure, you have to fund cell phones, but those cell phones alleviate the need for old fashioned switchboards and a few receptionists to track people down. Gas, even at $4, is cheaper on an adjusted basis than it was for our parents generation. Same with food.
This is a zero sum game — using more of our community’s production to fund taxes will reduce the amount that can go somewhere else.
Using the logic of so many here, we shouldn’t critique the size of our government’s budget. If it consumes 20% of our production today, should it consume 25% in ten years, and is it ok if it consumes 30% in twenty years, and so on?
We need to live within our means. You, me, our government. Everyone.
DtM: What is it with you and pie?
I’m not into teabags.
Still. I think your obsession is not healthy.
DtM,
Those 4100+ jobs are not just a shifting of wealth. All economists, left and right, believe in the economic multiplier theory. For example, The worker making a $1 will spend 80% of it back into the economy for groceries or goods or cable or whatever. 80% of that will be spent by those workers back into the economy, and so on….By the time that worker wage peters out, the $1 the state paid the worker puts $5 into the economy. It is called an economic multiplier and it is sound mathematics and economic theory. That state job is not just a shuffling of money.
The problem is that when we rich we never give a dollar amount and everyone making 60K/Yr seems to thick that it is them (as the median 2008 household income was $55,802/year (Reference: http://projects.washingtonpost.com/2008/elections/mn/census/) (this is the center income value for all household in MN while the US as whole median income is $41,994/Year). As we know lots of the rich file separate returns and hire tax consultants to create tax shelters to reduce their adjusted gross income (not to mention that capital gains are taxed much less than your earned income (by using sweat, brain, or skills). The reference for the following is http://www.taxpolicycenter.org table T03-0123
2002 adjusted gross incomes ranges returned in April 2003 to US government
adjusted percentage of
gross households in
income range
==================== =============
less than $10,000 23.7
$10,000-$20,000 16.6
$20,000-$30,000 13.3
$30,000-$40,000 9.7
$40,000-$50,000 7.6
$50,000-$75,000 13.0
$75,000-$100,000 6.8
$100,000-$200,000 6.6
$200,000-$500,000 1.6
$500,000-$1,000,000 0.3
more than $1,000,000 0.1
So if you are at $75,000 how long will it take for you to get into the top 0.1% bracket????
Attempting to get better table…
[pre]
2002 adjusted gross incomes ranges returned in April 2003 to US government
adjusted percentage of
gross households in
income range
==================== =============
$0-$10,000: 23.7
$10,000-$20,000 16.6
$20,000-$30,000 13.3
$30,000-$40,000 09.7
$40,000-$50,000 07.6
$50,000-$75,000 13.0
$75,000-$100,000 06.8
$100,000-$200,000 06.6
$200,000-$500,000 01.6
$500,000-$1,000,000 00.3
more than $1,000,000 00.1
[/pre]
A picture of MN tax levels can be found at:
http://www.mn2020.org/index.asp?Type=B_BASIC&SEC={DA8BEF89-CDA3-43FE-9ECC-5A6B4235EE39}
You are looking right at the numbers and still you dont see it.
Lets assume a billion dollars of taxpayer money could have saved 3,300 to 4,700 jobs. For the sake of easy math, let’s say that’s an even 4000 jobs. The basic equation would then look like 1,000,000,000/ 4000, right? That result (product, factor, whatever) would be $250,000.
Now you tell me which it is.
a.) Each state funded employee to be cut makes $250,000 dollars/year.
b.) All of the state funded employees to be cut make an average $250,000 dollars/year.
c.) The state needs to invest in $250,000 per year, for every job it creates.
Be honest and tell us any fourth option. Don’t try to twist this into rep vs dem, lib vs con. Just tell me what else this could be.
Now look at a billion dollars - $1,000,000,000. That doesn’t look like a lot compared to the $262,000,000,000 state GDP. (1/262s) But the state’s per capita gdp is $42,000.
Now if you’ve read this far without being distracted by Keith Olberman, tell me how many private sector jobs that 1,000,000,000 equates to, if we use the numbers you’ve been citing. 1,000,000,000/42,000 we come up with 23,809, right?
Now you tell me, is that
a.) 23,809 jobs being taxed out of the private sector every year in order to employ 4000 people.
b.) 23,809 potential jobs being taxed out of the private sector every year in order to employ 4000 people.
c.) the equivalent of 23,809 jobs being taxed out of the private sector every year in order to employ 4000 people.
d.) 23,809 the number of average minnesotans that would have to lose their jobs every year to pay for the proposed tax increase in order to employ 4000 people.
e.) the number of rich people that we would have to tax $42,000 every year in order to employ 4000 people.
d.) Just an extra $588 dollars per person in minnesota per year in order to employ 4000 people.
It doesn’t matter. 4000 jobs being directed by people that could potentially abuse their powers of oversight just isn’t worth a billion dollars left in the private sector to me. And frankly, I have to question why it’s worth it to you.