Special interests are quick to yelp when the pain of budget cuts hurts them but sometimes fail to offer viable solutions.
The Coalition of Greater Minnesota Cities, however, has proposed a remedy to Minnesota's $1.95 billion revenue shortfall that makes sense. The coalition, fearing substantial reductions in city aid payments that would force cities to cut services, raise property taxes, or do both, suggests lawmakers adopt a two-year income tax surcharge.
This is the remedy that was used in the 1980s when Gov. Al Quie and the Legislature grappled with revenue shortfalls. As soon as the state budget was balanced the income tax surcharge was discontinued.
It's important that a sunset provision be fixed to the surcharge so lawmakers aren't tempted to divert the money to more spending programs. Let financial experts calculate how long it should take to make up the shortfall and replenish the needed reserves and then be prepared to cut the surcharge off at that point.
No one likes tax increases but the surcharge proposal might be the fairest way to fix the problem.
The income tax is fair and broad-based. By applying the surcharge to that tax the pain would be spread among a large number of people and hopefully diminished somewhat. It's a progressive tax and not a regressive one such as the sales tax. A sales tax, as its critics point out, takes proportionally more of a poor person's income than it does of a wealthy person's.
Rather than target a particular segment of the taxpaying public to bear the burden for balancing the state budget, the Legislature should consider spreading the responsibility around so its impact is not as great.
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