A News Tribune editorial on Aug. 29 (Our View: “Don’t die in Minnesota — it’ll cost too much”) left out important information about a new gift tax the Minnesota Legislature passed this year as part of our balanced budget. Most importantly, the editorial reached the wrong conclusion about the best way to grow Minnesota’s economy. A thriving middle class, and not multimillionaires alone, is what is needed to put Minnesota on the path to success.
The editorial failed to mention who will pay the new gift tax: those fortunate Minnesotans who have the wealth to give away more than $1 million. This point bears repeating. The first $1 million in gifts any Minnesotan makes may be transferred tax-free.
That said, we all value the hard work and innovative thinking that contributed to the success of so many Minnesota multimillionaires. We want them to stay here and continue their contributions to our state. That is why the larger argument made in the editorial was so disrespectful to the vast majority of successful Minnesotans who stay and enjoy Minnesota’s high quality of life into retirement.
The editorial repeated the unsubstantiated claim that the multimillionaire gift tax will lead Minnesotans to flee our state in droves. At the editorial board’s urging, I reread the Center for the American Experiment study that was relied upon to reach this conclusion about “tax flight.” The study actually acknowledged that “people move for all sorts of reasons,” including (in the case of Minnesota) warmer weather. That is confirmed by a host of other economic studies showing that tax rates have little correlation to migration patterns. This is all part of the myth often trumpeted by those seeking to protect the wealthiest special interests that the way to grow our economy is from the top-down instead of from the middle-out.
Let’s also acknowledge that people who can give away more than $1 million have not been suffering over the past decade. Since the recession ended, around 100 percent of income growth has been captured by the top 1 percent. Instead, it has been the vast majority of Minnesotans in the middle who have paid more. Cuts to schools, higher college tuitions, property tax increases, and more out-of-pocket health-care costs are the direct middle-class pocketbook impacts resulting from choices our state made over the past decade while protecting the very wealthiest Minnesotans.
The good news is that in the last session we made a change. We chose a more balanced approach, including asking the wealthiest Minnesotans to pay a little more. As a result, we made significant progress, and middle-class Minnesotans will reap the benefits.
We balanced our state budget without gimmicks such as borrowing from schools, and already our state’s credit outlook has been upgraded due to our state’s “strong fiscal management.”
We invested in education at all levels, including all-day kindergarten for every Minnesota child. We know a world-class work force will help Minnesota’s economy thrive in the future, and our investments will help put our kids ahead of the curve.
We froze college tuition for students. After a decade of tuition hikes and mounting debt, Minnesota college students and families will receive needed pocketbook relief.
We reduced property taxes for Minnesota families. Property taxes are projected to decrease for the first time in a decade, thanks to the property tax-relief measures we passed in this budget.
Opponents to the budget we passed are free to argue against a multimillionaire gift tax. But it’s only fair they argue that tax-free multimillion-dollar gifts are a higher priority than property tax cuts for middle-class Minnesotans, more education funding for our kids, or tuition relief for our students. It is a matter of priorities. This year, our priority was investments for a stronger middle class, and we in the Legislature believe Minnesota’s economic future is stronger because of that choice.
In the week leading up to the beginning of the 2013-14 school year, Rep. Thissen traveled the state speaking with educators, parents and students about significant new investment that the 2013 legislature delivered for Minnesotans. From Duluth, Grand Rapids, Bemidji and Moorhead to St. Cloud and Willmar, Minnesotans were thrilled with the progress. As noted in the West Central Tribune: "Educators across Minnesota are pleased with the Legislature's move to pay for all day, everyday kindergarten, and they appreciate the overall increase in education funding." In Grand Rapids, Mike Fall noted that he was on the school board in Walker 25 years ago. And the hot topic of conversation 25 years ago was all-day kindergarten. All-day kindergarten will begin state-wide in the fall of 2014.
After Minnesotans elected DFL majorities in our State House and Senate last November to work with a DFL governor, many people asked us what they could expect in this legislative session. Our answer was: Progress.
First, however, we had to extract our state from the deep fiscal hole left to us two years before. This February forecast projected a $627 million budget deficit for the next two fiscal years, beginning July 1. It meant that we were again behind before we started.
Despite the financial obstacles, we crafted a balanced approach to righting the state’s fiscal ship, then moving it ahead. It is the first state budget in a decade that actually balances honestly, and without resort to accounting gimmicks.
As important, our budget starts looking beyond short-term crises and further down the road. We are building a better Minnesota by investing in priorities shared broadly by Minnesotans.
Foremost, our budget will provide our children the better educations they need for brighter futures. Minnesota’s long-term economic competitiveness hinges on our ability to deliver a world-class education for our kids.
For that reason, we invested more than $735 million in education, from preschool through college. As a result, every Minnesota child will soon have access to free, all-day kindergarten. Parents who were paying thousands of dollars to send their kids to all-day kindergarten won’t have to pay a dime. Thousands of children whose families couldn’t afford those costs will now receive the substantial academic benefits of full-day learning. And those schools that have been diverting other funds to offer kindergarten will be able to use that money for other needs.
Our budget ensures that thousands more young learners also will be able to attend high-quality preschool and child-care programs. Early learning scholarships will save families up to $5,000 per year, per student — and our state will take a big step forward in narrowing its achievement gap.
After a decade of steep tuition increases, students at the University of Minnesota and Minnesota State Colleges and Universities campuses will benefit from tuition freezes for the next two years. And more than 100,000 State Grant Program recipients from low- and middle-income families will receive additional financial aid to pursue their higher educations.
By improving our elementary and secondary education systems and making higher education more affordable, we can continue to offer businesses the country’s best workforce and give Minnesotans the knowledge and skills they need to succeed in this global economy.
But with thousands of Minnesotans still unemployed, we also took bold action this session to help put our state back to work. We made major investments that will provide thousands of good-paying jobs. They include major expansions by Mayo Clinic, 3M, the Mall of America and others that will create thousands of construction jobs and thousands more for operations. Those public investments will leverage billions of dollars in private investment in our state’s economy. We also increased the incentives we can offer new or expanding businesses to choose Minnesota.
And we paid for these investments honestly and progressively. The very highest income earners and some large corporations will pay more in taxes. Except for smokers, middle-class Minnesotans will pay the same state income or sales tax rates while realizing the benefits from $441 million in additional property tax relief, which reverses the property tax increases that resulted from the previous Legislature’s policies.
Moving forward, Minnesota still faces many challenges. But the work we did together this session — the work Minnesotans elected us to do — has made the state better. We did what we promised, and we believe Minnesotans from all walks of life will be better for it.
Mark Dayton is governor of Minnesota. Paul Thissen is speaker of the House. Tom Bakk is Senate majority leader.
© 2013 Star Tribune
Following the passage of the historic marriage equality bill in Minnesota, Speaker Thissen was interviewed by the Washington Post. You can read the full interview here.
A conversation with Minnesota House Speaker Paul Thissen on gay marriage
By Sean Sullivan, Updated: May 11, 2013
Minnesota is poised to become the 12th state to legalize gay marriage after the state House signed off on it Thursday on a 75-59 vote. The bill is expected to pass the state Senate next week and Gov. Mark Dayton (D) has said he will sign it.
We spoke with state House Speaker Paul Thissen (D) about the bill, what it took to win passage, and what it means for the larger debate.
FIX: Walk me through your Thursday. When did you figure out you had the votes to win passage?
PT: We felt we had the votes to pass on Tuesday when we called the vote. And I’ve got to say, it was a much more emotional debate for me than I thought was going to be. It was a pretty powerful three hours.
FIX: What made it an emotional debate?
PT: A couple things. A lot of the speeches people made. It was a very serious and respectful debate befitting the gravity of the topic. But also, just all the faces in the crowd, and just thinking how this is going to really change the lives of so many people in Minnesota and seeing them in the Capitol as we were taking up this vote. Those two things together.
FIX: Did you know that you were going to get some Republican support when you called this vote? (Four Republicans voted for it.)
PT: No. I did not. I had an inkling we might, but we didn’t call the vote until we knew we had the votes on our side.
FIX: What did it mean to have Republican support?
PT: I think it’s hugely significant, because it shouldn’t be a partisan issue. And nationally, it’s really not. There are so many Republicans across the country that do support moving in this direction. And so what that means, for the state, for the conversation we’re having, is that it has moved beyond being a partisan issue to being an issue about Minnesotans and their freedom and equality. And I think that’s hugely important.
FIX: How has Minnesota gone from being a state that last year proposed a constitutional amendment to ban gay marriage to a state that is now on the verge of legalizing it?
PT: I think because the strategy the folks adopted to defeat the amendment, which is really a strategy of going out and talking to people and engaging people in conversations about what this really means, made a huge difference in how people thought about it and talked about. It personalized the issue for people … and it was one of the examples where it really did change people’s hearts and minds.
FIX: When you first started this process, how confident were you that gay marriage could be passed and be signed into law?
PT: Earlier in the session? I wasn’t particularly confident at all that we would get there. I mean, I wasn’t un-confident, but i just didn’t know. We really adopted a similar approach to the campaign, within the legislature, which was engaging in individual conversations with members and having them talking to their constituents. Never saying, ‘you need to vote for this,’ but really kind of talking through the issues — the meaning of it, the politics of it, the importance of it, and what it could do for Minnesota. And everybody just kind of got to this point on their own.
FIX: What do you mean by that?
PT: It was every individual member searching their own heart, talking to their constituents and coming to the decision to support it on its own. And so it wasn’t that we were going to take up this bill no matter what. We allowed the individual members of the House to get there. And I think that kind of process made a big difference.
FIX: Minnesota is set to become the 12th state to legalize gay marriage. What’s the significance of this in terms of the larger debate taking place across the country right now?
PT: Two things. Clearly the momentum is picking up in this direction. I think just that is what you are seeing in other states as well as Minnesota. I also think it’s very significant though that Minnesota is the first state in the middle of the country, or at least in the Midwest, to have a legislature make marriage equality the law in that state. And so it’s not just kind of an East Coast/West Coast phenomenon. I think the significance of Minnesota’s vote is it makes it truly a national wave and movement.
© The Washington Post Company