Providing a non-partisan model for generating and sharing          

    essential information on public issues and proposed solutions              

10th Anniversary :  2005- 06 to 2015-16

   
                                                                                                  About Civic Caucus   l   Interviews & Responses  l   Position Reports   l   Contact Us   l   Home  

 
 Response Page - Madden  Interview -      


These comments are responses to the questions listed below,
which were generated in regard to the
Nan Madden Interview of
10-12-2012.
 

OVERVIEW

Nan Madden argues that Minnesota is not sustainably and fairly funding public investments that can make a big difference in the state's future. She cites as examples cuts in investment in higher education and in early childhood education. In addition, she argues that Minnesota's tax system is outdated and does not share the responsibility for paying for those public investments fairly. She proposes two strategies for improving Minnesota's tax and budget system: (1) Reform and modernize the tax system so that it can more adequately meet our needs as a state and share the responsibility more fairly; and (2) Adopt common-sense budget system reforms that encourage more responsible and sustainable budget choices.

For the complete interview summary see:  http://bit.ly/Sp2008

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 Nan Madden. Average response ratings shown below are simply the mean of all readers’ zero-to-ten a scientifically structured poll.

1. Public investments not funded properly. (6.9 average response) Minnesota is not sustainably and fairly funding public investments that can make a big difference in the state's future.

2. High tuition reduces needed access. (7.6 average response) High tuition is depriving lower income people of access to postsecondary education and skills training needed by the state's workforce.

3. MN missing early education opportunity. (7.4 average response) With thousands on waiting lists for early childhood education, the state is missing an opportunity to give high-risk kids, particularly, a much-needed early start.

4. Build inflation into forecasts. (6.8 average response) State law should be changed to build inflation into state economic forecasts.

5. Increase tax rates or add brackets. (5.5 average response) To address a budget shortfall and assure better funding of state services, state income-tax rates should be increased or additional brackets added.

6. Broaden the state sales tax. (8.4 average response) The state sales tax should be broadened to include online purchases, thereby leveling the playing field for all retailers.

7. Tax credit for poor, not deduction for all. (4.9 average response) A tax credit for low-income homeowners is preferable to giving all taxpayers a deduction for interest paid on home mortgages.

8. More funding only with better results. (7.9 average response) More state dollars to nonprofits and other providers should be contingent upon better outcomes.
 

Response Distribution:

Strongly disagree

Moderately disagree

Neutral

Moderately agree

Strongly agree

Total Responses

1. Public investments not funded properly.

8%

16%

4%

24%

48%

25

2. High tuition reduces needed access.

4%

8%

12%

40%

36%

25

3. MN missing early education opportunity.

4%

12%

16%

24%

44%

25

4. Build inflation into forecasts.

20%

0%

8%

32%

40%

25

5. Increase tax rates or add brackets.

32%

8%

8%

8%

44%

25

6. Broaden the state sales tax.

0%

8%

8%

24%

60%

25

7. Tax credit for poor, not deduction for all.

24%

12%

20%

28%

16%

25

8. More funding only with better results.

4%

0%

8%

56%

32%

25

Individual Responses:

R. C. Angevine  (10)  (7.5)  (7.5)  (10)  (7.5)  (10)  (2.5)  (7.5)

1. Public investments not funded properly. We need to see a balanced approach to budgeting that includes both cutting in some areas and additional revenue.

4. Build inflation into forecasts. Absolutely.

5. Increase tax rates or add brackets. As stated earlier, we need to look at additional revenue as well as cuts.  The income tax structure should be part of that process, including both rates and deductions.

6. Broaden the state sales tax. I won't like it but I agree.

7. Tax credit for poor, not deduction for all. There are too many other benefits to home ownership than just a tax deduction.

Anonymous   (10)  (7.5)  (7.5)  (7.5)  (2.5)  (10)  (10)  (7.5)

2. High tuition reduces needed access. This must include tech training as well as college.  There may be too much direction [of money] to college degrees that fail to provide jobs in needed areas.

7. Tax credit for poor, not deduction for all. Deductions for second and "recreation" homes should be terminated.

Anonymous   (10)  (10)  (10)  (10)  (10)  (2.5)  (0)  (7.5)

Bert LeMunyon  (2.5)  (5)  (5)  (7.5)  (0)  (10)  (2.5)  (10)

1. Public investments not funded properly. Minnesota needs to make better decisions on how to spend the limited dollars they already have instead of looking for more revenue from taxes.  Higher economic activity will generate more revenue.

2. High tuition reduces needed access. I think there are opportunities for qualified students to get a postsecondary education via scholarships, grants, loans, etc.  The problem is that not enough low-income students are qualified.

3. MN missing early education opportunity. How many kids miss an early education at home because both parents must work compared with those who desire to work?  Should the state be responsible for pre-school education?

4. Build inflation into forecasts. Yes, on both the revenue and spending sides.

5. Increase tax rates or add brackets. Raising income taxes will chase wage earners to other, lower tax states and chase retirees to Arizona and Florida.

7. Tax credit for poor, not deduction for all. Encouraging home-ownership leads to more stable communities.

8. More funding only with better results. Increasing state dollars for any expenditure should be contingent upon better results.

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

5. Increase tax rates or add brackets. Increased modestly.  We must be careful to remain competitive.

6. Broaden the state sales tax. If not corrected, the current system of allowing tax-free on line sales will kill off our retailers and the jobs they create for our state.

7. Tax credit for poor, not deduction for all. Need further information on the pros and cons of this deduction and its impact on stability of home ownership, stability of communities, and financial impact of removal at the higher income brackets.

8. More funding only with better results. Improvements of outcomes needs to be fair and realistic, tied to achievable goals.  i.e. funding domestic violence programs, is the goal to keep clients safe?  Is the goal to prevent domestic violence in the greater community?  Which goals can the program be held accountable for achieving?

David Dillon  (0)  (10)  (5)  (0)  (0)  (10)  (0)  (7.5)

1. Public investments not funded properly. Some improvements are no doubt called for but the case for such a blanket statement has not been made in my view.  I am always put off when words with traditional meanings such as "investments" are introduced into a discussion of taxation and spending, it makes it look like someone is trying to hide or spin the truth.

2. High tuition reduces needed access. Not mentioned in the comment but suggested in the interview is that the solution is greater spending.  I think there is much higher education could do to reduce their cost structures without harming the educational experience.  If examples in every other walk of life could be followed, they could improve education while lowering costs.

5. Increase tax rates or add brackets. Following in the footsteps of multiple other individuals I personally know, who have moved their residency out of high tax Minnesota, I am now exploring the same idea.  I just have to be out of the state 183 days per year.  That's more than I would like but the "investment" savings is probably just too much to pass up.  At some point, it's not even the money.  I know one company who formally had their board meetings in Minnesota who have now banned Minnesota just as a meeting location to prevent harassment of their folks by Minnesota tax collectors.

6. Broaden the state sales tax. Besides a question of simple fairness, Minnesota should show other states the way in support of our major retailing industry with companies such as Target, Super Valu and Best Buy headquartered here.

7. Tax credit for poor, not deduction for all. The time has come to eliminate, not add deductions.  The state should support / spend what it wants to support openly, not in hidden ways, with special deductions.  And, the same is true for taxation.

Don Anderson  (7.5)  (7.5)  (10)  (7.5)  (5)  (7.5)  (7.5)  (10)

Nancy Hylden  (10)  (7.5)  (10)  (7.5)  (10)  (10)  (2.5)  (7.5)

8. More funding only with better results. While there are many areas receiving state support that will benefit from outcomes [or] other metrics used to evaluate effectiveness, we must proceed with caution when deciding what measures are reasonable. For example, what outcomes measure the effectiveness of a chemical treatment program?  If a participant relapses, should the program be at risk of losing funding?  And if the outcome is something less than the ideal, is that a programmatic failure or an individual failure?  Making funding contingent on outcomes that are not "real" is also a problem - simply measuring how many people are enrolled, stay enrolled, etc., doesn't really measure outcomes.  Another example - What employment outcome is reasonable for an ex-felon with a history of life trauma and mental health problems? What if an individual is not able to sustain a five-day workweek, but might be able to handle four days per week?  The answer may seem obvious, but "outcomes expectations" can mean that if the individual isn't fully employed, the program is considered to have failed.    This is a very important and complicated topic!  Steve Thomas, Exec. Dir. of The Network for Better Futures, based in Minneapolis, is grappling with these issues and more as he operates under a "pay for performance" contract with Hennepin County to deal with chronic offenders in the criminal justice system.

Betty Schilling  (7.5)  (10)  (10)  (10)  (10)  (10)  (10)  (7.5)

Buzz Cummins  (10)  (10)  (10)  (10)  (7.5)  (10)  (5)  (7.5)

Anonymous   (10)  (10)  (10)  (10)  (10)  (10)  (7.5)  (7.5)

Fred Zimmerman  (1)  (8)  (5)  (0)  (0)  (8)  (0)  (5)

What is missing in this analysis are reasonable steps that education and other service providers could take to improve their cost-effectiveness and their efficiency. I am from education, myself, and several members of our immediate family are either teachers or college professors at well-known schools. The fact is that we have many people in education and other social services who do neither enough work or work hours comparable to what is customary in the private sector. Many DO, of course. But, instead of consistently lobbying for ever more money, these public servants should begin by working a full year, retiring at normal ages (70 or so), and ridding our professions of those who embarrass us all.

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

Chuck Lutz  (10)  (9)  (8)  (9)  (10)  (10)  (9)  (5)

And clothing should be included in sales tax.

Lyall Schwarzkopf  (6)  (8)  (8)  (6)  (5)  (6)  (5)  (8)

We need to change some of the costly regulations on early childhood education so that more people can afford it.  In addition we need to require Head Start to do a better job of educating children rather than baby-sitting.

Pam Ellison  (6)  (3)  (3)  (5)  (0)  (2)  (0)  (10)

1. Public investments not funded properly. I agree that the state needs more funding, but the state has wasted a lot of money over the years by getting involved in funding things that perhaps lie outside of the purview of what government should be doing. 

I believe that we do need to do something about Headstart programs, K-12 education and higher education as they have sustained huge cuts over the years.  Part of the problem is that K-12 education is constantly changing as often as Governors are changed in the state and as new trends occur in education.  Due to the constant changes for teachers and students, there is great battle fatigue that occurs and it is difficult at best to constantly be aiming at changing targets and expectations ever four years.  This causes stress for students.  Rubrics for learning are constantly changing, sometimes yearly in public education.  If you keep changing teaching to that degree, how do we expect students to keep up and actually learn with these challenges?  We need to stabilize the way we teach students.  We cannot continue to recreate the wheel.  We cannot continue to cheapen and dumb down the system by [replacing] highly qualified and therefore higher paid educational professionals with others that are not necessarily highly qualified [in order] to save a buck.  It has caused lowered test scores, higher illiteracy and encouraged social promotion of students who have continued to be promoted without proficiency in reading, writing and math so that once they reach high school they are still illiterate and expecting high schools to actually ready them for college.  This must stop.

Responsibility for public safety, education, infrastructure and maintaining the continual safety of infrastructure should be what government should concern itself with.  Offering farming subsidies that encourage already wealthy farmers to show a loss by making unnecessary purchases of equipment to keep their subsidies coming from the government should be cut first.  Ending subsidies to corporate America should be taken on.  Corporate personhood is a sham, and should be stripped from corporations.  When corporations make profits they should pay based on their profits.  There is a disproportionate amount of taxation being paid by individuals in the middle class and it is not enough to pay for the renovation of crumbling infrastructure and the growing needs of public education.  We need to purchase more intelligently.  If Minnesota would make certain that all grades were on the same textbook for subject areas and not allow so much flexibility for teachers to choose their own, there would be an inordinate amount of dollars saved.  Textbooks have been online and on CD ROM for at least the last ten years and are much more inexpensive if they need to be duplicated or replaced, and more portable for students, but most school districts continue to by textbooks for each student, and rarely charge students for loss of textbooks.  The average high school textbook runs anywhere from $85.00 – $200.00 per book.  We need to make people accountable for loss and collect those monies, from garnering parent wages if necessary.  We do not hold anyone accountable anymore.  We just let everything slide by, but these are real revenue dollars lost forever, when not pursued.   
 
2. High tuition reduces needed access.  I think that lower income students have a greater advantage to accessing grants and scholarships for higher education that middle-income students do.  I speak from experience.  My husband and I made together about $60,000.00 per year and had mortgage debt, school debt of our own and had 2 kids in college and the FAFSA system expects middle income parents who still have debt of their own, and are staring at retirement within 15 years to pay a certain percentage of their children’s college.  On principal, when I went to college, my parents were considered middle income but it wasn’t expected back then that they bear the burden of their children’s college.  Paying for college back then was reserved for the upper crust of society at that time, due to the fact that they were the elites and had plenty of money to throw around.   But for the working class we all generally paid our own way, without any help from our parents.  I never was able to gain any decent grants or scholarships due to the fact that my parents made just enough to disqualify me as someone who had needs.  The lower income kids were always finding money, through foundations and grants and charities, but there is no help for middle income families now or was there then, other than incurring the debt of student loans. It was easier for us as parents because the rate of inflation of the cost of college was relatively low comparatively speaking to what it was in the first decade of this century for our kids.  I worked at a high school in Saint Paul from 2000 – 2010 and ran for public office twice and have studied different taxation reform ideas, and I do not think the ideas proposed are sustainable over time nor do I believe through my experience at school that high school students that come from lower income households have a more difficult time seeking and receiving financial aid nearly as much as middle class non-minority students that go to college.  Case in point.  I have a daughter that owes over 42,000.00 for her undergraduate degree and was laid off in 2010 from a full time job and decided to go back for a Masters Degree program because she could not pay for her student loan payments when she could only find a part time job to sustain her.  She was able to qualify for a yearly scholarship of 8000.00 per year if she maintained a higher than 3.5 grade point average which she did do, but her yearly tuition over the four year program was about 23,000.00.  In addition she needed to take on a part time job to offset her expenses or she would owe more than she does now.  When you add another $15,000.00 - $17,000.00 for a Masters degree, on top of the $42,000.00 she already owes for her undergraduate degree, she will be paying $57,000.00+ and she is going to be 30 this coming year.  When you factor in that that total amount is what I paid for my starter house back in 1981, they issued me a 30-year mortgage to pay for that home.  In 30 years she will be 60 years old and “may” be able to pay off her debt in time to file for Social Security (if it still exists) by then.  A similar scenario exists for my son who graduated with a Masters degree this past June, is newly married and owes $75,000.00 for his undergraduate and masters degree combined, he is 25, so he “may” be able to pay it off by the time he is 55.  Wow.  So much for the advantages of being a middle class non-minority, with parents who had little way of helping with tuition and college costs.  We helped when we could, but one of us had just paid of our final student loans two years prior to our children entering college.  So I think to state that the lower income students cannot afford college, there are far more financial aid options for them due to their lack of income than there are for middle income students whose parents pay a larger tax burden, are still indebted and are staring retirement in the face.
 
3. MN missing early education opportunity. Again, people who are on AFDC generally qualify for tuition for early childhood education and perhaps it is important to really study changing the income amounts for parents who have children who need these programs.  We cannot only consider income, but we need to consider the debt to income ratios of families.  When someone is making a combined income for a family of four of $60,000.00 but has a mortgage payment of 2000.00 per month, groceries, paying for day care, health care, cars, etc., it can change the picture when there is a full understanding of all the outgoing expenses as well.  Just looking at income and not looking at the financial challenges a family has, along with the income, is not prudent and not wise.  There may very well be more lower-middle-class to middle-class families that do not qualify for programs but still cannot afford to put their children in early childhood options.  Do not be fooled that it is just lower income people who are struggling.
 
4. Build inflation into forecasts. This may or may not be true.  I have no way of knowing. But as long as you have legislators that are trying to please their parties, and line their pockets with lobbyist dollars, there will always be pork barrel spending and pet projects that occur, and in some cases their districts do not even want the projects. I have heard stories of these things occurring on the campaign trail numerous times from citizens all over the state from 1998 though 2006.  Again, government needs to limit their funding on stadiums and ice arenas and building sports complexes for wealthy team owners and wealthy players and stick to the public safety, free and equal public education and infrastructure, that would save a lot of extra revenue to build inflation into state economic forecasts.  Leave these other “feel good” projects for the corporations to fund with their names on the facilities for marketing and advertising purposes.  It works that way in other places.
 
5. Increase tax rates or add brackets. I heartily disagree for several reasons.  There is a huge group of folks out there who are not being taxed at all, except for sales tax.  All those that are engaging in illegal businesses that are highly lucrative.  Those who traffic drugs, are engaging in human trafficking and prostitution.  These people are making high incomes, and are not paying income tax unless they purchase goods.  That is why I believe in a flat consumption tax at the same percentage rate for all.  No matter what you earn it is fair.  No deductions, no corporate loopholes and no IRS.  It wouldn’t be necessary at the level that it is now, it would be easy for people to calculate, it would be collected at the register, and it would finally be taking in some revenue for those who engage in illegal businesses.  We could find additional forms of revenue by legalizing and taxing certain businesses that are not due to go away anytime soon.  That is the only way to make a tax fair for rich and poor alike, and [to simplify] the tax code so every citizen could file taxes without the need of a CPA or attorney.  When the loopholes are gone for everyone it would be the greatest thing we could do.  Also corporate personhood would need to be rescinded. When illegal businesses are only being taxed by the state sales tax on the goods they purchase, imagine how meaningful the streams of revenue would become once the sales tax would be replaced by a flat consumption tax raised to 15-20% for everyone.  No deduction loopholes.  I believe the state would get more revenue than they would by tinkering with the increase formulas and adding brackets but keeping the complicated code with all its deductions. Let’s streamline; let people use the additional savings [in] income tax to increase payments for Medicare and/or Social Security to bridge the shortfall experienced in coming years and save it for future generations.  It just seems to make more sense to me.  The wealthy will pay the same percentage the rest of us do, and perhaps we can end the class warfare on the lower and middle classes.

6. Broaden the state sales tax.  I don’t know, but they are collecting taxes on online purchases.  At least some of the purchases I make have been taking taxes on not only the purchases but they are also taxing shipping as well.  So I thought that was pretty much happening already.

7. Tax credit for poor, not deduction for all.  If you are really reforming taxes and really doing something like a flat consumption tax and no deductions and applying that across the board, why should there be a mortgage credit for anyone?  Isn’t that another form of deduction?  My understanding is that lower income people pay little to no taxes, and they generally use more state services that are costly to provide.  Please understand. I agree that lower income people need concessions made to them, however, most of them do not own homes, and there are programs such as Habitat for Humanity that help them achieve home ownership and offer huge benefits in the way of lower percentage rate loans and other incentives that make it easier for them to stay in their homes, once purchased. If property taxation is handled as I have suggested below, there should be no need for anyone to receive a mortgage credit or deduction.
 
I believe that middle income earners under the current system [are] taxed between 25-30% on income taxes, and when you add in state sales tax at 6.8% - 7% depending on your locale, and gasoline taxes.  We are being taxed well over the 30% level.  Property taxes are also regressive, because the taxes should be based on what is paid for the property and should not increase until the owner decides to sell the property. If the property equity goes up, when the next owner pays for the home, the rate of taxation would increase appropriately.  If the equity goes down, the new owner would pay, again, appropriately based on the price they paid for the dwelling.  People who live in their homes make no additional profit on their homes unless the equity has risen at the time they sell their homes.  It is the most regressive tax currently.  So when you add in property taxation to the mix, you could easily be paying 40% or more.

8. More funding only with better results. More state dollars to nonprofits and other providers should be contingent upon better outcomes. I would say that I don’t believe it is government’s role to finance non-profit organizations in any way.  I believe that corporate foundations, and charitable foundations set up by wealthy families and private individual donors should fund nonprofits.

Wayne Jennings  (6)  (9)  (10)  (7)  (10)  (9)  (7)  (10)

Thanks for the fresh thinking.

Gene Franchett  (10)  (10)  (10)  (10)  (10)  (10)  (10)  (10)

Al Quie  (10)  (10)  (10)  (8)  (0)  (10)  (0)  (10)

Ray Schmitz   (10)  (8)  (5)  (10)  (10)  (9)  (7)  (8)

William Kuisle  (1)  (1)  (1)  (0)  (0)  (7)  (0)  (9)

Roger A. Wacek  (0)  (0)  (0)  (5)  (0)  (5)  (5)  (0)

Given that over 50% of college graduates under 25 are either unemployed or underemployed, many living with their parents, why do we want to spend tax dollars to exacerbate this situation? This is asinine government behavior that after the last election will accelerate.

Bright Dornblaser  (10)  (10)  (10)  (10)  (10)  (10)  (10)  (8)

Robert J. Brown  (5)  (5)  (6)  (0)  (0)  (10)  (6)  (10)

One comment on the Minnesota Council of Nonprofits: I am a full time volunteer at a small nonprofit serving low income diverse populations and I read about the Council's training which always costs too much for the young people I work with. Is the Council held to the same standard as the nonprofits when it comes to providing better outcomes with its programs?

Tom Spitznagle  (1)  (5)  (4)  (0)  (1)  (5)  (5)  (10)

1. Public investments not funded properly. Use of the popular and highly overused term “sustainably” or “sustainability” is vague and meaningless unless accompanied by some hard logic to explain exactly what [one] is attempting to [convey].  The implication that “sustainable” is good and “unsustainable” is bad when used in communications about issues is a bit insulting to the message receiver.  These terms are thrown around freely in public discourse unfortunately.
 
The obvious underlying message in this discussion is the promotion of more state tax revenue and more money for government-funded programs, especially non-profits.   No mention was made of property taxes – the most unfair and misunderstood source of government revenue in Minnesota.  But since income and sales taxes are the primary sources of revenue to fund non-profit grants, who cares about the property tax mess – right?
 
Instead of focusing on raising or cutting taxes, the discussion should focus on improving the efficiency of service delivery by both government and government-funded entities.  This type of big picture emphasis is largely absent in the public arena it seems.  Only in government does it seem to be acceptable to continually raise costs without any real attempt to improve service quality and efficiency.

 

    

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.

   Verne C. Johnson, chair;  David Broden, Charles Clay,  Bill Frenzel, Paul Gilje,  Jim Hetland,  Marina Lyon,
Joe Mansky,  John Mooty,  Jim Olson,  and  Wayne Popham 


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

contact webmaster
 

 

 

Hit Counter