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'No new taxes' is ruining Minnesota

When it comes to the quality of life, you get what you pay for.

That's bad news for Minnesota, which has spent much of the last decade merrily dismantling the high-tax, high-services tradition that had made the state a national leader.

Nearly a decade ago, "No New Taxes" politicians sold the idea that shrinking government and cutting taxes would bring economic prosperity.

But the opposite has occurred, according to a report by Jeff Van Wychen of Minnesota 2020, a public policy think tank based in Saint Paul.

No state has cut taxes, fees, and other charges more than Minnesota since 2002.

But as the public investment declined, so did Minnesota's performance in key areas: Employment growth, pupil-to-teacher ratios and road conditions all worsened relative to other states.

Adjusted for inflation, total taxes and other payments have declined by $220 per person from 2002 to 2007 -- $46 more than in the next closest state.

Compared to many other states, Minnesota has been blessed with clean, effective government at all levels -- tax dollars are generally used well, to the benefit of the public.

That's why the loss of those tax dollars hurts so much: Once a national leader in areas such as education and employment, Minnesota is now sliding toward the middle.

The Minnesota 2020 report, "On Our Way to Average: Ranking Minnesota's Economic Performance," examines 13 economic performance indicators, ranging from income, to job growth, to the condition of the state's roads.

On nine of the 13 measures, Minnesota's performance relative to the rest of the nation has fallen.  On the other four measures, there was no change.

As Van Wychen points out, one of the most disturbing trends is in the area of job growth.  Minnesota ranks 39th in employment growth since 2001; in other words, only 11 states have done worse than Minnesota in job growth.

From 2002 to 2009, total U.S. employment increased by 2.5 percent; meanwhile, the number of jobs in Minnesota fell by one percent.

The report identifies several other disturbing trends.  From 2002 to 2008, median household income grew by one percent nationally, but shrunk by three percent in Minnesota.  While the typical U.S. family income has increased, the typical Minnesota family income has declined.

In education, Minnesota's rank on pupil-teacher ratios in public schools slid from 25th to 37th since 2002, while our rank in the percentage of students performing at or above the "basic" level in math and reading slipped from third to eighth.

Minnesota's ranking on the condition of its roads has fallen dramatically from eighth to 27th.

In general, Minnesota's performance relative to other states has slipped during the "no new tax" era.  The state is headed in wrong direction.

Minnesota's future depends on determining long-term investment needs and funding them appropriately.