So-called stimulus package would halt plans to help underinsured children

Gov. Tim Pawlenty's plan to balance Minnesota's books contains many reasonable proposals.

For starters, the state would reap an extra $102 million by doing away with an exemption some corporations have used to avoid paying taxes on income from overseas operations. Individual taxpayers will shed few tears over that one.

Taking $250 million from the state's reserve's fund seems reasonable. That's why it's there. Cutting $54 million from the state college system would involve some pain, but if that's the price to pay for protecting funding for K-12 education and local government aid to cities, so be it.

But the plan includes one real puzzler: Pawlenty wants to cut the state sales tax by one-eighth of 1 percent.

He calls it a "modest stimulus for the economy." We see it as a thinly disguised end-run around some of the tax increases that the DFL-controlled Legislature has passed over his veto.

The numbers work out this way. A consumer who buys a new iPod for $100 will save about 12 cents. In the market for something bigger? Buy a used car for $10,000 and your tax savings will be $12.50.

For individuals, that paltry amount of money simply won't be felt. But at the state level, those nickels and dimes of lost revenue will add up to another $77 million per year that will have to be cut from budgets that already are stretched thin.

To help pay for this "stimulus package," Pawlenty would delay a long-promised 2 percent pay raise for workers in long-term care facilities, and would halt a plan to give two months of health insurance to children who currently are ineligible for state-subsidized coverage. More than 20,000 children would be affected.

We know our governor hates tax increases, and we wish they weren't necessary. But this symbolic tax cut in a time of economic crisis stinks of "voodoo economics" at its worst, and we hope our legislators waste little time in sending it to the cutting-room floor.

So-called stimulus package would halt plans to help underinsured children

Gov. Tim Pawlenty's plan to balance Minnesota's books contains many reasonable proposals.

For starters, the state would reap an extra $102 million by doing away with an exemption some corporations have used to avoid paying taxes on income from overseas operations. Individual taxpayers will shed few tears over that one.

Taking $250 million from the state's reserve's fund seems reasonable. That's why it's there. Cutting $54 million from the state college system would involve some pain, but if that's the price to pay for protecting funding for K-12 education and local government aid to cities, so be it.

But the plan includes one real puzzler: Pawlenty wants to cut the state sales tax by one-eighth of 1 percent.

He calls it a "modest stimulus for the economy." We see it as a thinly disguised end-run around some of the tax increases that the DFL-controlled Legislature has passed over his veto.

The numbers work out this way. A consumer who buys a new iPod for $100 will save about 12 cents. In the market for something bigger? Buy a used car for $10,000 and your tax savings will be $12.50.

For individuals, that paltry amount of money simply won't be felt. But at the state level, those nickels and dimes of lost revenue will add up to another $77 million per year that will have to be cut from budgets that already are stretched thin.

To help pay for this "stimulus package," Pawlenty would delay a long-promised 2 percent pay raise for workers in long-term care facilities, and would halt a plan to give two months of health insurance to children who currently are ineligible for state-subsidized coverage. More than 20,000 children would be affected.

We know our governor hates tax increases, and we wish they weren't necessary. But this symbolic tax cut in a time of economic crisis stinks of "voodoo economics" at its worst, and we hope our legislators waste little time in sending it to the cutting-room floor.