OUR OPINION: DEFICITS
Budget talk is all the rage now at both the national and federal levels. And time is running out for both Congress and the Minnesota Legislature as they crunch numbers and make decisions that will affect all of us.
Here in Minnesota Gov. Dayton tried nudge the state budget discussion off dead center by cutting in half his proposal to hike taxes on high earners. His revised plan would raise taxes on only the top 2 percent rather than the top 5 percent of tax filers. The new plan would raise taxes on couples with taxable income of $250,000 or more or singles earning $150,00 or more. So instead of raising $3.4 billion through taxes Dayton’s proposal would raise $1.4 billion in taxes.
That offer was quickly rebuffed by Republicans who stated that half of a bad idea (raising taxes) was still a bad idea.
Our view is that some sort of revenue enhancement — taxes to most of us — will be necessary to get out of the hole we’re in. Minnesota has had eight years of fixing budget problems without raising taxes (unless one counts property taxes or cigarette taxes). The deficit Minnesota faces is too large to be solved by taxes or program cuts alone.
And at this late date in the legislative session we would just as soon see a budget solution hammered out in a special session. Late-night sessions and fatigued legislators could combine to produce some awful legislation if lawmakers attempt to rush a deal through before midnight Monday.
One likely scenario is that the governor and legislators agree to a temporary surtax on the wealthiest Minnesotans with an ironclad sunset clause.
At the federal level we agree with House Speaker John Boehner that the raising of the ceiling on the debt limit be coupled with serious and definable spending cuts. This would send a message to the rest of the world that we stand behind our commitments and that we’re serious about putting our financial house in order.
The sooner the president and Congress come to an agreement on the debt ceiling the better. It’s too serious of an issue to be dithering about in the final days before the drop-dead Aug. 2 deadline.