Archive for June 2016

Minnesota in the Middle in Terms of Government Spending

Minnesota has a reputation among conservatives as a high tax, big government state. However, based on some of the better metrics, total state and local government expenditures in Minnesota are about equal to the national average, with Minnesota ensconced in the middle of the fifty states in terms of expenditure rankings. Minnesota generally ranks fairly…

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Minnesota GDP Growth Above Average Since 2013 Tax Act

Minnesota conservatives have complained loudly and repeatedly that tax increases in general—and the tax increases enacted in 2013 in particular—will ruin the state’s economy, as businesses flee in response to an “uncompetitive” business environment. However, a recent review of Gross Domestic Product (GDP) compiled by the U.S. Bureau of Economic Analysis (BEA) shows that economic…

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Mid-Week Reads: American Politics and SCOTUS

Every week, North Star will take some time out of our schedules to bring you our favorite reads from the past week. Jeff Van Wychen What’s Ailing American Politics The leadership of American political parties—the so-called political establishment—have been frequently (and often deservedly) maligned. However, these establishment figures, according to Jonathan Rauch, helped to create…

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Dynamic Scoring Overlooks Benefit of Public Investments

The lack of consensus among economists regarding the impact of tax changes upon the economy is a major impediment to the use of dynamic scoring in the budgeting process, as noted in the preceding North Star article. Another problem with dynamic scoring models is that, while they emphasize the potential drag on the economy resulting…

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Dynamic Scoring: Caveat Emptor

In recent years, there has been a push at both the federal and state levels—coming primarily from conservatives—to adopt “dynamic scoring” to evaluate the impact of changes in tax and fiscal policies. Dynamic scoring attempts to predict the impact of fiscal policy changes, taking into account their anticipated economic repercussions. Dynamic scoring is an alternative…

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Long-Term Trend in County Aid Still Down, Despite 2014 Increase

In 2013, Governor Dayton signed into law a major increase to County Program Aid (CPA), effective in 2014. That $40 million increase boosted the CPA funding level by 24 percent. However, in a chart featured in the preceding North Star article, this significant aid increase registered as only a relatively small blip. This anomaly illustrates…

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County Property Taxes Up Since 2002, Revenues Down

In 2014, Minnesota counties saw a significant increase in state aid, which contributed to a decline in real per capita county property taxes and a modest increase in revenues. However, even after that aid increase, county aid is dramatically less today than it was in 2002, while county property taxes are much higher, even after…

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Conservative Misapplications of the Laffer Curve

For the last four decades, a sizable phalanx of conservative thinkers has argued that government revenues can be increased by cutting tax rates. In reality, tax rate reductions have consistently failed to generate new revenue, both at the federal and state levels. Nonetheless, faith in the tax-cut-as-revenue-raiser dogma continues. “Tax-cut-as-revenue-raiser” claims are rooted in the…

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