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These comments are responses to the questions listed below,
which were generated in regard to the
Myron Frans Interview of


Gov. Mark Dayton's recent budget proposal designing a new tax and spending structure had to deal first with the immediate problems of a looming $1.1 billion deficit in FY2014-2015 and with paying back the school funding shift of $1.1 billion, says Minnesota Commissioner of Revenue Myron Frans. Because of these problems, he does not believe the tax reforms in the governor's proposal could be done in a revenue-neutral way. He notes that in the last decade, the state has become more and more reliant on the property tax, instead of keeping the property tax, sales tax and income tax relatively equal as sources of revenue. The governor's tax reform proposals generally broaden the base of the sales and income tax, while lowering the rates. An exception to lowering the rate is the proposal to have the top two percent of income earners pay a higher income tax rate. The budget proposal attempts to reduce the growing reliance on the property tax by giving a $500 rebate to property tax payers. The governor's proposal will be re-evaluated after the February budget forecast is issued, Frans concludes.

For the complete interview summary see:

Response Summary: Readers have been asked to rate, on a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, the following points discussed by Frans. Average response ratings shown below are simply the mean of all readers’ zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

1. Balance revenue sources. (4.7 average response) The three primary state taxes in Minnesota--sales, income and property--should each generate approximately the same amount of revenue.

2. Increase taxes to fund rebate. (3.9 average response) To finance a proposed new rebate for homeowners' property taxes, the state should increase revenue from state taxes.

3. Tax clothing sales. (6.2 average response) he state sales tax should be extended to clothing.

4. Tax more services. (4.0 average response) The state sales tax should be extended to legal, accounting, lobbying, consulting and other services.

5. Raise tax rates on high earners. (5.7 average response) The state income tax should be increased for those individuals with the highest incomes.

6. Lower corporate rate; close loopholes. (7.3 average response) The state corporate income tax rate should be reduced to offset elimination of selected corporate deductions and credits.

7. Dedicate revenue to transit. (3.9 average response) Metro transit should receive a guaranteed share of the state sales tax, rather than an appropriation from the state general fund.

Response Distribution:

Strongly disagree

Moderately disagree


Moderately agree

Strongly agree

Total Responses

1. Balance revenue sources.







2. Increase taxes to fund rebate.







3. Tax clothing sales.







4. Tax more services.







5. Raise tax rates on high earners.







6. Lower corporate rate; close loopholes.







7. Dedicate revenue to transit.







Individual Responses:

Bert LeMunyon (2.5) (0) (0) (5) (0) (7.5) (0)

2. Increase taxes to fund rebate. The state should reduce spending.

3. Tax clothing sales. The state should not tax clothing and food.

5. Raise tax rates on high earners. This will chase even more taxpayers to Arizona and Florida.

7. Dedicate revenue to transit. All expenditures should be made from the general fund.

Ray Ayotte (7.5) (5) (10) (10) (7.5) (10) (0)

Anonymous (0) (0) (0) (0) (0) (0) (0)

5. Raise tax rates on high earners. Many high tax states are looking for ways to lower taxes as they are losing many taxpayers, which we are too.

6. Lower corporate rate; close loopholes. Rates should be lowered under current system .

Anonymous (5) (0) (5) (0) (0) (5) (5)

1. Balance revenue sources. [I] want to see spending reduced first before I can comment.

3. Tax clothing sales. Smaller tax on all clothing purchases

6. Lower corporate rate; close loopholes. Have to see details

7. Dedicate revenue to transit. Get rid of prevailing wage, it is time for Davis Bacon to go.

John Branstad (10) (7.5) (7.5) (7.5) (10) (10) (2.5)

3. Tax clothing sales. Applying the tax on items above a specific dollar amount ($100, as proposed) seems less complicated than applying it to all clothing purchases and offering a credit. Intellectually-honest Republicans should appreciate this "user-fee"-style approach. Don't want to pay the tax? Simple - just limit your purchases over $100.

Les Madison (7.5) (5) (2.5) (2.5) (10) (7.5) (0)

1. Balance revenue sources. The proposed tax on internet sales is not a tax on those businesses it is a tax on us as residents of the State of Minnesota. Why can't the state see that?

2. Increase taxes to fund rebate. Why increase one place and decrease in another? It comes out near the same for those of us that pay taxes. Everyone needs to pay their fair share. Those of us that have done well and own property deserve a rebate or credit but why do renters who have a tendency of not trying as hard to get ahead and have likely wasted more money foolishly?

3. Tax clothing sales. This will hurt the communities that border other states that already have sales tax on clothing. Neighboring states residents do come to Minnesota to buy clothes for this reason. It does not hurt as bad putting the $100 threshold in the formula but I can see this disappearing especially with a democratic governor who loves to spend instead of cutting expenses. Sure the drop in sales tax looks nice but this is just a gimmick so that more things can be taxed and then raise the sales tax up higher than it is now.

4. Tax more services. Luckily I don't pay for these services very often so the tax would have minimal effect on me but that may change in the future. It is easy to get a high legal bill and then pay taxes on [it]. It is still a new tax -- democrats spending themselves rich and us poor.

5. Raise tax rates on high earners. They make it and can afford to pay it. This would include our overpaid and ineffective athletes and the huge businessmen that rape us to get what they want. Greed never pays and the sooner they see it the better.

6. Lower corporate rate; close loopholes. This is okay as long as the net effect is not giving the businesses a break. Those businesses that make more should be forced to pay more however these businesses will pass this expense on to the customers in the form of higher costs. The Wal-Mart’s and similar businesses in the state should pay more.

7. Dedicate revenue to transit. Metro transit does NO good for us in rural Minnesota and [infuriates us] every time the thought comes up that our tax money is going to them when our roads out here need repair and updated. They should be on the same diet that us in rural Minnesota are on and should be guaranteed no money automatically. They need to go through the budget process too.

Anonymous (2.5) (2.5) (5) (0) (7.5) (5) (0)

Anonymous (2.5) (5) (7.5) (7.5) (7.5) (5) (0)

Roger Schmitz (0) (0) (0) (0) (0) (0) (0)

1. Balance revenue sources. Eliminate income taxes and cut property taxes and cut spending.

2. Increase taxes to fund rebate. Cut spending.

3. Tax clothing sales. Only if income taxes are eliminated and spending is cut drastically.

4. Tax more services. Only if income taxes are eliminated and spending is cut drastically.

5. Raise tax rates on high earners. Equity in taxes. Everyone at the same rate or eliminate income taxes all together.

7. Dedicate revenue to transit. It needs to pay its own way.

Dave Broden (5) (2.5) (10) (10) (7.5) (10) (0)

1. Balance revenue sources. I see no reason whatsoever to start with this objective. This may be the best answer but there needs to be some reason and rationale supporting such a statement. One could argue that sales should be the larger since it reaches all people who are users of state services. On the other hand, due to income disparity, one could argue that income tax should be greater. Property is however not uniformly owned and applied so how does this fit? Some innovation in how to balance the three makes much more sense.

2. Increase taxes to fund rebate. The shell game continues. Make the tax policy be logical and not just move funds from one pot to another to make things look good. This is simply political and not logical. The old homestead exemption made more sense — it was clear and simple.

3. Tax clothing sales. The goal is a 21st century tax system—we are no longer an agrarian society or an industrial society. Citizens need to understand this as do the various special interest groups—taxing what we buy across the board must be in the picture. Some form of credit to the low-income citizens is worthy and that may be a cut of $100 as suggested or some other format.

4. Tax more services. The growth of service industry must be taxed in an appropriate way. Business-to-business taxes may not be the best answer but should be in the mix, perhaps at a reduced rate or in some form of rebate or credit to industry etc. Focus of this tax needs to be on remaining competitive and growth while also capturing appropriate elements of relevant revenue.

5. Raise tax rates on high earners. This subject is only a political ball to toss. Some increase is worthy of discussion and can be wisely applied. To do so without also looking at the total impact, revenue gained/lost, etc., has only slightly been discussed. Slow down and think and consider broadening, eliminating loop holes, etc., [that] may have a greater effect.

6. Lower corporate rate; close loopholes. Answer is simple: Minnesota needs a growth strategy. This is one of the centerpieces of that need.

7. Dedicate revenue to transit. Dedicated funds are there only to please special interests. While a local tax makes sense we too often focus only on transit and not on products. Transit means nothing if we cannot move products across the entire state. A metro transit tax is an earmark type of fund that has no purpose and logic.

Laura Waterman Wittstock (2.5) (2.5) (0) (0) (10) (10) (10)

Chris Brazelton (7.5) (5) (7.5) (7.5) (10) (10) (10)

2. Increase taxes to fund rebate. If we could reform and fund LGA, property taxes should go down within local communities.

7. Dedicate revenue to transit. Long-term projects need reliable funding.

Don Anderson (2.5) (7.5) (7.5) (0) (10) (7.5) (2.5)

Scott Halstead (5) (2.5) (10) (0) (0) (7.5) (10)

4. Tax more services. We shouldn't tax business-to-business-to business services which would result in the likely loss of jobs.

5. Raise tax rates on high earners. We need to make a much greater effort on corporate, individual income and import tax reform at the national level.

7. Dedicate revenue to transit. They should receive the guaranteed portion of the state sales tax raised in the metro area. 50% should go for operating and maintenance costs and 50% for new construction. Fares should pay 50% of the operating and maintenance costs. We need statewide high cost transit project performance standards. We need to take away the authority of counties in managing the county-wide sales tax. We need to locally elect the Metropolitan Council.

Gail Theisen (2.5) (5) (7.5) (7.5) (10) (10) (7.5)

3. Tax clothing sales. For items $100 or more

5. Raise tax rates on high earners. If you make more, you should pay more; it is very basic and makes sense.

Dennis L. Johnson (5) (0) (0) (0) (0) (2.5) (0)

1. Balance revenue sources. These taxes cumulatively result in Minnesota being the 6th most highly taxed state in the US. This speaker is clearly biased toward increasing revenue rather than reducing expenses.

2. Increase taxes to fund rebate. Opposed to any increase in any tax - already high enough. Find another way to do it.

4. Tax more services. The result will be, like all taxes, that the added cost is passed on to those receiving services.

5. Raise tax rates on high earners. And drive them out of the state. Foolish idea

6. Lower corporate rate; close loopholes. Only if done very selectively and carefully with no increase in total revenue.

7. Dedicate revenue to transit. Mass transit is a loser wherever done, as private transit becomes ever more fuel-efficient and cheaper.

Mark Daleiden (10) (5) (10) (10) (10) (10) (0)

2. Increase taxes to fund rebate. Why do it if it just shifts the money around unless it actually does reduce it for a purpose other than just for politics.

3. Tax clothing sales. I like the idea of [taxing] clothes over $100.00. If they can afford that $5.50 more won't kill the sale.

4. Tax more services. Lobbying is a good one. Just that alone should bring in quite a bit of funding.

7. Dedicate revenue to transit. Metro transit should not be funded with state money. It is not fair to people in Moorhead, Duluth and other northern towns and cities to pay for something that only benefits the people who live in the metro area.

Josh D. Ondich (7.5) (0) (0) (0) (0) (7.5) (2.5)

Paul Wagner (1) (0) (2) (0) (0) (2) (5)

Myron you spent 45 minutes on your listening tour in front of fifteen business owners in my factory. That left each of us a minute to comment. 7000 listeners?

The state that I love has a spending problem, not a revenue/tax problem. Local taxes force levies and take it to a local vote. With a shared $8 million dollar payroll between Minnesota and Wisconsin, where do you think we are growing jobs? The Cheeseheads are kicking our tails in more then just football.

Mark Ritchie (na) (na) (na) (na) (na) (na) (na)

This is one of the best ever - thanks!

Chuck Lutz (10) (10) (10) (9) (10) (7) (7)

Carolyn Ring (5) (8) (3) (8) (3) (8) (9)

There are so many variables it is difficult to answer most of these questions. There is no doubt we must reduce spending and we need more revenue.

Stephen Bosacker (6) (4) (6) (2) (6) (8) (8)

Any sudden changes in tax policy/enforcement will harm some people and may harm many. The more dramatic the change in a period of time, the more harm. Carefully designed policy changes can minimize "unintended consequences". This proposed plan may well be too weak/poorly designed to minimize these "hits" on our population

I agree that we need to make some changes in proportions of tax sources. The question is how this will be done and how quickly a plan will be implemented. Adding a sudden and dramatic sales tax (5.5%) to business services will kill many companies, stress many more and cause these costs to be passed on to customers and clients. Are you prepared for the statewide impact of this (increased unemployment, slower recovery, etc.)? Longer-term consequences are also important. What will happen with Minnesota businesses who become responsible for paying sales tax but have never done so before? Will they leave Minnesota? Will fewer companies move to or start in Minnesota? I suggest a graduated increase – starting with 0.75%. Use this to test what consequences come from this first, make adjustments and give companies and their customers time to accept the changes

Making this one proposal a silver bullet will likely cause it to fail. Engaging stakeholders in a malleable dialog about solving our financial challenges will help. For example, any argument that ignores (or covers over) the real dynamics of our state systems will likely strengthen entrenched positions and stop progress. Focus on what happens in our state systems and find creative ways to tweak/tune how it works to ease us into financial balance and strength. It will take many small changes in many parts of our system to get what we want and need in Minnesota. By all means sidestep position-based posturing to "win" and cause the other side to "lose". This needs to be a win-win-win-win. Good leadership will help that happen.

Arvonne Fraser (5) (8) (9) (5) (10) (7) (10)

Frans and Dayton have done a very good job of putting these questions before the legislature.

John Milton (7) (9) (10) (10) (10) (7) (10)

William Kuisle (1) (0) (0) (0) (0) (6) (0)

Starting another rebate program for property taxes is horrible tax policy. If the property tax system needs a fix, then fix it. Do not do a rebate that just compounds the problem with another "credit". Broadening the sales tax only sets it up so "spenders" can increase it back to the 6.875 in the near future and hope the taxpayer will not notice.

Tom Spitznagle (1) (1) (5) (2) (2) (7) (1)

A $500 property tax rebate makes no sense whatsoever given the state's current financial condition. Furthermore, it masks the true cost of local government and makes it harder for citizens to hold local government officials accountable. Minnesota's property tax system is a big mess. Fix it; do not twiddle with it anymore. It's likely the worst tax system of any of the 50 states. Reference the recent Property Tax Working Group report to the Minnesota Legislature - a good topic for a future Civic Caucus discussion.

John Adams (5) (8) (10) (3) (3) (8) (na)

(1) I see no logic to the idea that each source of revenue (income/sales/property) should be one-third of the total. It's an assertion that lacks clear defense. (2) I favor a retail sales tax (on all food, clothing, everything else, including personal services) at a much lower rate. For those who howl about regressivity, I favor a negative income tax. (3) More attention should be paid to capping tax expenditures that favor upper-income groups, while at the same time limiting the actual rates for upper-income groups. The higher the rate, the more that people are encouraged to avoid them. It's not that I favor giving upper-income households a break on income tax rates; it's that such rates are so easy to avoid. People are mobile. The number of upper-income Minnesotans who manage to avoid those rates by becoming Florida (or other low/no-tax state) residents even though they live much of the time here is pretty high. Even Bill Cooper brags that's what he does. (4) I think that the business services tax is a bad idea. Such services are competitively supplied from many sources in other states. Why drive that business out of our state? It sounds politically attractive to some, but the economics don't make sense to me.

Mina Harrigan (3) (3) (10) (8) (8) (10) (5)

Alan Miller (4) (5) (10) (10) (10) (5) (3)

Paul and Ruth Hauge (8) (4) (9) (5) (10) (8) (8)

Much discussion is needed. Let’s allow the legislators hear the arguments and the results should indicate what is best for the state.

Lyall Schwarzkopf (5) (4) (7) (4) (4) (6) (4)

By raising taxes on the upper income people, of which I am not one, we force that many more rich people to live in Florida or other places and we lose the taxes they were paying plus we lose the money that they gave to many good causes in Minnesota. The 60 days living in the state is a killer. Jim Ulland's op-ed article in the Minneapolis Star Tribune is right on. By losing these higher-income tax payers with the new rates, we lower-income people will pay higher taxes. Finally it makes no sense at all to increase the sales tax on all taxpayers and income tax on some tax payers so that the state can give us back $500 of the new taxes we paid in order to pay our property tax.

John Nething (0) (0) (0) (0) (0) (10) (0)

Tim Hall (na) (na) (na) (na) (na) (na) (na)

We need an equilibrium study to find out what taxes should be while keeping us competitive with other states.

Wayne Jennings (4) (8) (3) (8) (10) (5) (4)

Juris Curiskis (na) (na) (na) (na) (na) (na) (na)

In other words, I assume that the rebate will cost $1.46 billion. There is a much better solution:

Rather than the $500/homestead credit, strengthen the existing property tax circuit breaker, which provides property tax credits based on incomes.

Tom Swain (5) (7) (9) (5) (10) (8) (5)

Al Quie (0) (0) (10) (0) (0) (10) (0)

Jerry Fruin (5) (4) (10) (1) (2) (10) (5)

Tax all clothing. Tax food, but have a low-income credit. Do away with the renter rebate bribe. Mortgage interest deduction should be phased out.

Dave Hutcheson (8) (8) (8) (3) (8) (9) (5)

Larry Schluter (9) (4) (9) (5) (8) (9) (5)

We need to be careful how we extend taxes to business. Better to reduce the number of deductions they get.

Kevin Edberg (5) (3) (10) (2) (10) (8) (4)

The sales tax should be broadened to all clothing; rates can be reduced after we decide how much revenue is needed for state operations. Corporate income tax base should be broadened by elimination of deductions and loopholes so as to become more predictable, and rates lowered. Income tax rates should be increased for high income Minnesotans (top 2%); I'm not opposed to increases for the upper portions of "middle class" taxpayers; income tax circuit breakers should be used to offset impact on sales tax on clothing for the lowest income brackets. Leave property taxes alone for now (e.g., no $500 rebate); reduced housing values have reduced actual taxes paid for many homeowners, with greater tax incidence falling on businesses; make school districts whole on the shift, and move to making local school districts and municipalities more accountable in property taxing decisions. Major themes: broadening tax base to stabilize revenue; reduce tax rates where that broadening has happened; get our debt issue off our back and stop kicking the can down the road.


The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions,
reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   David Broden,  Janis Clay,  Bill Frenzel,  Paul Gilje,   Jan Hively,  Dan Loritz (Chair),  Marina Lyon,  Joe Mansky, 
Tim McDonald,  John Mooty,  Jim Olson,  Wayne Popham  and Bob White

The Civic Caucus, 01-01-2008
2104 Girard Avenue South, Minneapolis, MN 55405.
Verne C. Johnson, chair, 952-835-4549,       Paul A. Gilje, coordinator, 952-890-5220.

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