Quotes from the Minnesota Free Market Institute on the current events. Want to get our perspective? Email info [at] mnfreemarketinstitute.org

On the tax bill passed out of conference committee early this morning that would raise $1 billion from new taxes on alcohol, excess credit card interest and the wealthiest Minnesotans:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“Once again, the legislature is ignoring objective tax reform making the tax system more efficient in favor of tweaking the existing system of inefficient tax collection. The conference committee bill is not based on any recognizable economic principle; it is entirely a political creature with unseen consequences such as lost productivity, lower-than expected tax revenues and more costly credit for responsible borrowers.”

 

On a bill floating about the legislature that would provide loan guarantees and tax breaks to the construction industry:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“It’s more than a little amusing to see legislator’s flummoxed  because they aren’t privy to a list of ‘secret projects’ eligible for new state support. Taxpayers are already on the hook for billions in state projects whose only criteria is they were “shovel ready” and “created jobs.” The so-called “secret projects” are “shovel ready” and promise to “create jobs,” so, using legislative logic, what else matters? What matters to legislators is that unions and developers are controlling where the new money would go; legislators, like taxpayers, are out of the loop. And they don’t like it. Welcome to the pawn-row, guys.”

On Gov. Tim Pawlenty’s reaction to the economic development legislation that forgives more than $32 million of a state loan that helped build St. Paul’s Xcel Energy Center:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“The governor’s response that the loan forgiveness provision is ‘extremely troubling’ and ‘it could jeopardize the entire bill’ is reminiscent of his stance when he line-item vetoed the Central Corridor funding in the 2008 bonding bill. Pawlenty knows a bargaining chip when he sees it. In a second bonding bill the Central Corridor was back in and the governor got $20 million to purchase land for Vermillion State Park among other concessions. My bet: The loan forgiveness and ‘The Pond’ are a done deal; what remains to be seen is what Pawlenty is dealing for behind door #2.”

On the State’s efforts to ban online gambling:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

That state’s effort to keep Minnesotans from online gambling can have only one of two motivations: Moral or competitive. 

If the state is motivated by the immorality and consequent social problems created by gambling, then consistency would argue that the state lottery disband for the same reason. If the state is motivated to stop online gambling because it cuts into state gambling revenue, then we have a case where the state is working against the interests of gambling consumers by eliminating competition.

Add to the state’s intolerable act of using its regulating power to manipulate the market for its own benefit and not that of the citizens it is supposed to serve, the ubiquitous Internet and the creativity of the technological community makes the objective of preventing Internet gambling unachievable. Making Internet gambling illegal simply turns honest Minnesotans into criminals for no good reason other than the state’s gangland desire for a bigger “piece of the action.”

On Dane Smith’s comment in the Pioneer Press story about the Tax Cut Rally at the capitol in St. Paul:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

Reacting to the tax-cut rally that attracted thousands of Minnesota families to the state capitol in St. Paul, Dane Smith, president of the progressive think tank Growth & Justice told the Pioneer Press, “”The fact is we have a budget crisis of historic proportions, and if we don’t raise a reasonable amount of revenue to continue funding vital public investments, we will threaten our prospects for long-term prosperity, A reasonable return to tax levels from a few years ago is necessary…”

“The juxtaposition of the thousands of  middle-class Minnesota families rallying for tax cuts and the progressive call for higher taxes to provide for ‘vital public investments’ is something of a disconnect. The rally turnout is evidence a lot of Minnesotans don’t see a lot of the investments that Legislators want to make with a lot of their money as being the least bit ‘vital.’ Progressive legislators are like the ever over-exuberant Boy Scout who drags the little old lady across the street whether she wants to cross it or not. The turnout at the tax rally shows that street-wise Minnesotans understand excessively high taxes damage the quality of life, and they aren’t about to be dragged down by an over-exuberant Legislature intent on earning its progressive merit badge.”

 

On the University of Minnesota competing for star-power professors:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“There’s an ironic circularity in the University of Minnesota’s pursuit of star-powered professors: The state, we are told, needs to raise taxes on the state’s highest earners so the state has the money to invest in higher education and student tuition aid to compensate for increased costs of attracting star-power professors – who require salaries that put them among the state’s highest earners.

“Sensible, economics-based tax reform, “economics” being one of the subjects taught at those institutions of higher learning, might consider reducing income-taxes to make Minnesota more attractive to highly skilled and mobile individuals. Certainly we should not make it even more difficult and expensive for the University by raising taxes on the people it is trying to hire.”

On the pending retirement of Justice David Souter from the Supreme Court:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“Already the talk is what “liberal-leaning” judge will replace “liberal-leaning” Justice David Souter on the U.S. Supreme Court, which immediately transmutes the discussion from law and justice to politics. Whoever the nominee to replace Souter, expect a confirmation hearing that probes into his or her policy positions, not the nominee’s philosophy of jurisprudence. Don’t expect questions, from either side of the aisle, about the meaning of the words in the Constitution. Numbers alone make whomever President Obama nominates a virtual lock for the Supreme Court, but what a wonderful opportunity the confirmation hearings are to question Obama’s nominee on the constitutionality of TARP, the federal takeover of the banking and auto industries, and the separation of power issues those actions raise.”

On the metro area property tax increase for transit:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“This should not be a surprise. In March of 2008, Rep. Bernie Lieder, chief architect of the tax-laden transportation bill that passed over the governor’s veto, told the Civic Caucus that if the newly enacted transit sales tax fell short of meeting required subsides for transit, then counties should look to property taxes to make up operating shortfalls and not come to the state – despite the sales pitch that a new sales tax dedicated to transit would provide property tax relief. We find ourselves spending motor vehicle sales tax AND the new transit sales tax on public transit and public transit is still running an operational deficit. The Legislature is on the verge of adding a property tax increase to cover the transit deficit, and a raft of new public transit projects are on the drawing board – none of which is projected to come close to a breakeven operating cost. The simple fact is the Met Council’s transit expansion plans are unsustainable without a massive infusion of new taxes.”

Context

On the metro area property tax increase for transit:

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“This should not be a surprise. In March of 2008, Rep. Bernie Lieder, chief architect of the tax-laden transportation bill that passed over the governor’s veto, told the Civic Caucus that if the newly enacted transit sales tax fell short of meeting required subsides for transit, then counties should look to property taxes to make up operating shortfalls and not come to the state – despite the sales pitch that a new sales tax dedicated to transit would provide property tax relief. We find ourselves spending motor vehicle sales tax AND the new transit sales tax on public transit and public transit is still running an operational deficit. The Legislature is on the verge of adding a property tax increase to cover the transit deficit, and a raft of new public transit projects are on the drawing board – none of which is projected to come close to a breakeven operating cost. The simple fact is the Met Council’s transit expansion plans are unsustainable without a massive infusion of new taxes.”

On the 2009 House DFL Budget Proposal:

Pat Anderson, President, Minnesota Free Market Institute:

“The budget proposal put forth by the House DFL caucus goes way beyond their oft-repeated sales pitch of ‘only taxing the wealthy,’ it takes real money out of the pocket of every hardworking Minnesotan, regardless of which tax bracket they find themselves in.”

On “Taxing the Wealthy”

Pat Anderson, President, Minnesota Free Market Institute:

“Taxes on the ‘wealthy,’ like so many progressive policies, actually work against the stated objective … ironically, to woo new high-earners with job mobility to the state, companies must offer higher wages to offset higher income taxes, in effect increasing, not decreasing, the wage gap that seems so ‘unfair.’ Mobility is much easier for citizens and businesses in the 21st century.”

On “Preserving Government Jobs to prevent Unemployment”

Craig Westover, Senior Policy Fellow, Minnesota Free Market Institute:

“The benefit to public employees of collecting a salary is easily seen. The benefit of their spending to local economies also is easily seen. But the great burden weighing on Minnesotans like a sodden cotton coat is not seen. The salary the non-essential public employee spends on himself is money a taxpayer no longer has to spend on himself; the money the public employee spends supporting local businesses is money not spent by the taxpayer supporting other local businesses. … irrespective of how hard or conscientiously a public employee works, if he is performing a service outside the scope of government authority or a service with little useful purpose, his salary is a net loss to the economy.”