Tuesday, September 13, 2005

State in surplus

Here’s some proof that cutting spending and holding the line on taxes is the most fiscally responsible way to solve a deficit.

Minnesota treasury: Near $140 million uptick

A near $140 million uptick in state revenue collections last month is "a little bit of a cushion" for the Minnesota treasury but no cause to expect a return to the robust fiscal surpluses of the late 1990s, state finance officials said Monday.

The state general fund took in $1.209 billion in tax collections in August, $139.9 million more than had been projected, Finance Commissioner Peggy Ingison announced. But, she added, most of the extra money came from a large, unidentified estate tax payment that she described as "an anomaly and a one-time event."

State economist Tom Stinson said the tax payment may have amounted to as much as 16 percent of the estate, depending on when the person died. Since January 2002, the state estate tax has been phasing downward from that rate, he said.

Although Ingison said monthly revenue figures should be viewed with caution, she noted that the August windfall followed July collections that were $6.7 million more than predicted. For the first two months of the 2006 fiscal year that began July 1, all four major tax categories -- individual and corporate income taxes, sales taxes and motor vehicle excise taxes -- showed slightly positive results.

That indicates that after several deficit-wracked years following the 2000-01 recession, state government may be returning to fiscal steadiness, Ingison said.

"Aside from the estate piece, we're pretty much right on the mark," she said. "I wouldn't be celebrating anything, but it's a little bit of a cushion."
Conrad deFiebre
(Source: Star Tribune, September 13, 2005)

Remember the 2003 session? Newly elected Gov. Pawlenty rolled the Senate DFLers into adopting his no-new-taxes way to solve the deficit. Pawlenty’s swiftness caused the DFL to overthrow Sen. John Hottinger as Majority Leader and elect former Republican Sen. Dean Johnson to lead their caucus through the next two sessions. Sure, the next sessions sucked, but our party is stronger because of it.

Who would've thought that in Minnesota, the "Land of 10,000 Taxes," we'd see a budget deficit resolved without a tax hike?

7 Comments:

At 10:42 AM, Anonymous Anonymous said...

Let's kill the death tax!

 
At 11:23 AM, Blogger North Star Politics said...

"How would've thought that in Minnesota, the "Land of 10,000 Taxes," we'd see a budget deficit resolved without a tax hike?"

Well, first of all, exempting the "how would have thought," which I can only presume is a sloppy typo, we DIDN'T hold the line on taxes - we raised cigarette taxes, then were lied to about its being a tax. This surplus number is ridiculous - it even says that we're right on target, except for a rich person's dying. Good job ignoring the material that's right in front of you.

 
At 11:49 AM, Blogger Republican Minnesota said...

Sloppy typo, yes. Thank you for pointing that out. Now allow me to attack your sloppy argument:

1.) The surplus is from the previous biennium which was July 1, 2003-June 30, 2005.
2.) It’s a fee, not a tax, because a fee is imposed on voluntary behavior.
3.) The fee was proposed for this upcoming biennium. You see, NSP, the politicians plan on a budget BEFORE the biennium starts.
4.) Pawlenty hinted at the fact that the surplus may be larger than this at the state convention this weekend.

Thank you for showing how little you know about the public policy process in Minnesota.

 
At 2:38 PM, Blogger Kevin from Minneapolis said...

Actually RM, you are wrong. From the Tribune article:
The state general fund took in $1.209 billion in tax collections in August, $139.9 million more than had been projected,

This surplus has nothing to do with the previous biennium (which did, FYI, end with a large surplus). What happens is back in February the Dept. of Revenue made a forecast of how much money it thought the state would take in this month. Then, after reciepts come in every month, they issue a letter revising their prediction to reflect actual state revenues. I see these letters almost every month and it is important to note that the state has been pulling in more money than it expected every month now for several months, going all the way back to 2004.

 
At 9:31 PM, Blogger North Star Politics said...

A fee is imposed on voluntary behavior? Shall we start calling it the "sales fee"?

 
At 8:03 AM, Blogger Republican Minnesota said...

The fee is a distributor fee. It is payed to the state by the distributors, not the smokers. It is the decision of said distributor to choose to pass the fee onto the consumer.

 
At 9:44 AM, Blogger Kevin from Minneapolis said...

RM is right. The HIF is added to the price of cigarettes at the wholesale level, there for that is where it is paid. There is nothing in the way of law or regulation requiring anyone to add the 75 cents to the retail price.

 

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