The Evidence is Clear: Republican Approach to State Budget Worked for All Minnesotans

State budget surpluses, schools paid back, more people working, consumer confidence on the rise – our first reaction is to thank everyday Minnesotans for hanging in there during the recession and working hard to dig Minnesota out.

Our recovery may be modest by historical standards, and we still suffer from misguided federal economic and monetary policies, but Minnesota is in a stronger position than most states.
It also serves as a reminder that the dire predictions from Democrats about the past two-year Republican budget were wrong.

State budgets don’t unilaterally control our state economy, businesses and workers do, but what more evidence is needed to declare the Republican approach to budgeting in 2011 a complete success?

“If we control state spending and taxes, the economy can improve and so will the health of our budget.”

“Republicans said in 2011 if we control state spending and taxes, the economy can improve and so will the health of our budget,” said Keith Downey, Chair of the Republican Party of Minnesota. “With the books now closed on the 2011 Republican budget, it is clear our approach worked for the hard working taxpayers and families of Minnesota.”

Here are Four Indisputable Truths Regarding the 2011 Budget:

1. The final quarter that just ended $463 million in the black was the result of Republicans holding the line on taxes in 2011. It had nothing to do with the 2013 Dayton/DFL budget passed in May that just started on July 1st. In fact, Governor Dayton has made a very concerted effort to distance himself from the 2011 budget and the Republican approach. Starting with his inaugural address in January 2011:

“To those who sincerely believe the state budget can be balanced with no tax increase – including no forced property tax increase – I say, if you can do so without destroying our schools, hospitals, and public safety, please send me your bill, so I can sign it immediately.”

And how many times have we heard him say “I agreed to it, not with it” when referencing the 2011 budget? The jury is in and Governor Dayton has been proven wrong.

2. The surplus from the 2011 Republican budget has paid back the school shift through current law, not because of anything the DFL did in the 2013 session. Paying back the schools has always been the first priority under law for any budget surplus and it’s no different this time. Without the strong performance of the state’s economy under the 2011 Republican budget, schools would still be owed over $2 billion. The only contribution made by the Democrats in 2013 was to get the Republican windfall to schools a few months early.

3. The DFL budget just passed continues the school shift at over $400 million. After using their supposed opposition to the gimmick of a K-12 shift to win the 2012 legislative elections, Gov. Dayton and Democratic legislators continued the shift in 2013 despite raising taxes over $2.1 billion. Thanks to the surpluses of the previous Republican budget, the vast majority of the shift has now been paid back, yet the DFL need for spending required them to utilize another round of borrowing from the schools! Governor Dayton continues to deny this fact, repeating at his press conference this week that his budget had “no shifts, no gimmicks, no games.”

4. People change behavior when their taxes go up. Look no further than the Minnesota Management and Budget office’s report this week for evidence of this fact:

“But much of the observed increase is believed to be attributable to high income taxpayers choosing to move even more income into 2012 than was projected in February’s forecast.”

This is an ominous fact for the future of Governor Dayton’s 2013 budget which raised taxes over $2.1 billion. The success of his budget relies on these same taxpayers not making any changes to their behavior despite the increase in their tax burden. The threat of higher taxes resulted in significant behavior changes, the reality of higher taxes will do the same.

“The 2011 Republican approach to the state budget turned the state’s finances around and put Minnesotans back to work,” added Downey. “I hope for the sake of our state, the Dayton/Democratic 2013 approach does not ruin this positive momentum.”

– 30 –

Prepared and paid for by Republican Party of Minnesota, Keith Downey, Chair
Not Authorized By Any Candidate Or Candidate’s Committee
www.mngop.com

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