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Pawlenty's 'no new taxes' has hurt Minnesota
When Gov. Tim Pawlenty announced he was not running for a third term, he also claimed that he’d made a positive difference in Minnesota by bringing more competitiveness to the state through keeping it out of the “top 10” in taxes.

While Pawlenty can be a very personable politician, I couldn’t help but wonder if Minnesota is truly better off because of his administration.

It is true that the size and scope of Minnesota’s government is smaller now than it was in the 1990s. According to Minnesota Management and Budget Department, that is mainly due to the income tax reductions at the end of that decade which benefited mostly high income earners.

This was followed by the governor’s “no new taxes” approach to balancing budgets. So in 2006, as a percentage of personal income, Minnesota’s state and local government expenditures did drop in rank to 30th in the nation.

How we compare

Did our smaller government bring more competitiveness to Minnesota compared to the rest of the nation? Did our rank in employment growth improve? How about our rank in median income growth? Did we rank lower in our unemployment rate?

The answers are discouraging.

By 2006, Minnesota’s performance declined and deteriorated relative to the rest of the nation in all of these categories. This is particularly true for employment growth — even before the “great recession.” (Minnesota 2020 Research Report: Minnesota’s Slip Toward Mediocrity”)

Reducing taxes has not made us more competitive. Pawlenty tried to sell tax cuts and small government to Minnesota as a jobs-producing strategy, but the reality demonstrates it didn’t work.

There are other indications of deterioration in our state. Fair taxation has gone by the wayside. People earning more than $350,000 pay 3 percent less in state and local taxes than most of the rest of us. Meanwhile, Minnesota 2020 reports property taxes for all of us (at least in the St. Cloud area) have increased 35 percent since 2002 in inflation-adjusted dollars.

Other effects

On top of this, responsible fiscal budgeting and accounting procedures have been pushed aside. State budget transparency has been minimized by accounting for inflation in estimating revenue but not in expenditures. State debt has been “hidden” by pushing it to lower governmental units like school districts through “accounting shifts” — which cost school districts like St. Cloud hundreds of thousands of dollars.