$1.4 Billion for a Problem that Doesn't Exist

This is how fundamentally warped the perception and politics of property taxation has become in this state:

In the Governor's budget presentation describing the impact of his tax reform proposal, we see a hypothetical happy Washington County family sledding down a hill accompanied by this description

 Household income: $306,000

MN taxable income: $250,000

Increase in income tax: $0

Home value: $534,500

Property tax rebate: $500

Additional sales tax: $0

Presumably this specific example was included to demonstrate how few people would feel the tax increases from the proposed tax reform. It seemingly never crossed anyone’s mind that an alternative jaw-dropping reaction to the example might be this:

Under what possible definition of efficient, accountable government would the state ever be justified in using state tax dollars to unconditionally give $500 to all homeowners, including those making well over a quarter million dollars a year, to help pay for spending the state has no responsibility for (and which is largely none of their business)?  Especially when facing billions of its own deficits and IOUs.”

And the troubling part is the public and political reaction to the proposal may be positive.   From the budget comments we have seen from the political opposition, there has been considerable handwringing over haircuts and oil changes but little if anything about a fiscally irresponsible handout of this magnitude.

As the media digs deep into the spending program minutiae, make no mistake, the centerpiece of the Governor’s proposed budget is a mammoth giveaway. The $1.4 billion price tag of this rebate exceeds most of the other proposed spending/investment increases in the Governors budget by a factor of ten.

In our recent Star Tribune editorial we pointed out the specious nature of the three legged stool argument, the facts refuting the notion of a Minnesota property tax crisis, and pointed out the local property tax is not and should not be the bogeyman everyone thinks it is. But Round 1 in the budget battle is a stunning victory for perception.

In a self-declared era of “no more fiscal games,” the dice has been rolled and the token moved here: