Jennifer Vogt-Erickson: State needs comprehensive investments across board

Published 10:21 pm Monday, May 15, 2017

My Point of View, By Jennifer Vogt-Erickson

Let’s connect some dots regarding the state budget and rural Minnesota.

I’ve noticed people are complaining about the jump in local property taxes this year, and for retired homeowners especially, this is a big concern. Here’s what could reduce our property tax burden: increases in local government aid and county aid.

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Our state has a budget surplus of $1.65 billion, yet the Republican-controlled House has resisted restoring LGA to 2002 levels in its budget bill. These lawmakers have a much greater focus on cutting taxes.

Jennifer Vogt-Erickson

Income taxes are progressive, property taxes are regressive. Relying more on property taxes tips a larger share of the tax burden to people who can least afford it.

The largest area of tax cuts that House Republicans want is for Social Security income ($236 million). Some income tax relief for Social Security benefits is reasonable, but exempting income all the way up to $64,000 for married seniors is probably not justified when nearly one-third of Minnesota’s seniors are living at less than 200 percent of poverty (about $32,000 for a married couple). Tax cuts for seniors in more secure financial shape should be balanced with public investments and programs that help working families and poorer seniors.

Here’s the most ignoble tax cut — House Republicans want to give an estimated $162 million in estate tax “relief” to the less than 2 percent of estates that are rich enough to owe any tax at all. Why are Republicans more protective of a handful of multi-millionaires’ estates than of our grandparents and neighbor ladies who are living off their barely adequate nest eggs and losing sleep over their property tax hikes?

Something else we need to consider, which seems to get lost in the rhetoric of cutting taxes, is this: Rural areas get more funding from the state than they pay in taxes. This is contrary to the persistent perception that rural folks send their hard-earned tax dollars to a money pit in St. Paul where it disappears forever.

From a 2014 House Research Department report using 2010 data, the seven-county metro area had 53.7 percent of the state’s population but contributed 63.8 percent of the state’s revenue. They got 52.8 percent of spending in return.

The 80 rural counties had 46.3 percent of the population. They contributed 37.2 percent of revenue and received 47.2 percent of state funding.

Thus, rural counties got quite a bit more from the state in proportion to what they contributed in taxes. For every dollar rural counties paid in state taxes in 2010, they got $1.27 back in state funding overall. Let that sink in.

Yet one might think from rural Republican lawmakers that the tables are turned the opposite way. (The Senate Office Building remodel!)

The truth is that the Capitol is the heart that pumps extra blood back to the furthest extremities of the state. Rural communities have many attractive qualities such as open spaces and sparse traffic, but distance from the economic engine of the Twin Cities is a major disadvantage.

The imbalance of state funding is justified because the metro area needs healthy rural communities in order to thrive itself. Rural areas like Freeborn County produce agricultural commodities that form one pillar of Minnesota’s economy and are vital to the food industry, biofuel production and agricultural export markets.

Rural areas also produce human capital like high-potential students with good work ethics who often settle in the metro area where they find the best educational and employment opportunities. This is popularly known as the rural “brain drain.” It would be nice to draw more of these kids back, especially if they’re trying to figure out how to return.

Cutting too many taxes, though, will result in fewer investments in rural communities. We already see this playing out in the House Republicans’ budget compared to Gov. Dayton’s requests — less money for public schools, less money for community colleges, less money for workforce housing, less money for LGA.      

This would all mean fewer opportunities for our most promising young people who wish to someday settle here and raise a family. It means reduced chances for families who have committed to this area for many years, perhaps for generations, even as the county population has declined by nearly one quarter since its peak in the early 1970s.

Are we worth investing in? Of course we are. We should connect the dots and vote like we want the comprehensive investments our DFL governor envisioned. Republican legislators like Peggy Bennett are letting rural areas down.

Jennifer Vogt-Erickson is a member of the Freeborn County DFL Party.