Burnsvile Council member offers innovative proposal to give taxpayers more control over how their money is spent
Minnesotans hand over a considerable chunk of their hard earned money to various levels of government: federal, state, and local. In 2020, Minnesota Management and Budget estimated that state and local government in the state will take in 15.0% of resident’s Personal Income in FY2021. You worked for that money, and then its gone.
Where does it go? Maybe it gets spent on books in classrooms or police on the streets. Or maybe it gets spent on an elevated walkway at the zoo, a highway rest stop that looks like Frank Lloyd Wright built it for Howard Hughes, or bailouts for a failing ski resort.
As the economist Milton Friedman explained back in 1980, when you are spending your money on yourself you are motivated to get the best value. But, when you are spending someone else’s money on someone else – the situation government is in when it spends your cash – that motivation is greatly reduced. We would get more efficient government spending (stop laughing at the back) and more engaged citizens and taxpayers if we could find a way to give the people who earned the money more say over how government spends it.
An intriguing idea in this direction comes from Burnsville City Council Member Cara Schulz. The Sun This Week reports:
Schulz wants the city to study a system allowing property taxpayers to direct a small portion of their city taxes to services they highly value.
Just as Minnesota tax forms allow a donation to the Nongame Wildlife Fund and federal forms allow payers to check the box for a $3 donation to the Presidential Election Campaign Fund, Burnsville taxpayers could direct some extra dollars from their bills to parks, police, fire, public works or other services.
When money is involved, people “reveal what their true preferences are, what they think is most important,” Schulz said. “I want to find out what those preferences are.”
The city has done plenty of citizen and business surveys over the years, but there’s a difference between “stated preference and revealed preference,” Schulz said.
“I think we’re going to get people more interested in what we’re spending money on, what the budget process is,” said Schulz, who opposes property tax increases and has voted against every city budget and levy while in office. “But I also think we’re going to find out really quickly what our residents either highly value or feel needs more love.”
Schulz’ proposal is an innovative step in the right direction. Let us hope it succeeds and serves as a model for others.
John Phelan is an economist at the Center of the American Experiment.