‘D’ is not for Dayton

Minnesota’s governor scores an abysmal grade for economic policies.

Minnesotans have grown accustomed to Governor Dayton patting himself on the back for his stewardship of the state’s economy. But a report recently released by the Cato Institute suggests the picture isn’t as rosy as he makes out.

Cato’s “Fiscal Policy Report Card on America’s Governors” gives Dayton a D grade for fiscal policy. This poor grade is a result of his tax hikes and increased spending. As Chris Edwards, the report’s author, writes, “Under Dayton, Minnesota’s general fund spending has increased by 49 percent in 7 years (2011–2018); it rose 4.7 percent in 2017 and 8 percent in 2018.”

The report goes on:

• In 2013, Dayton raised annual revenue by $1 billion, almost 5 percent of total state tax revenue, increasing the top individual income tax rate from 7.85 percent to 9.85 percent.

• In 2014, an election year, Dayton reversed course and approved tax cuts of about $500 million a year.

• With a budget surplus in 2016, Dayton rebuffed a Republican proposal for major tax cuts, instead proposing to raise gas taxes and vehicle fees by $400 million a year.

• In 2017, Dayton and the legislature reached a compromise on tax cuts, few of which would spur economic growth.

• In 2018, Dayton vetoed a compromise bill to increase education spending and modestly cut individual and corporate tax rates because the plan did not include low-income tax credits. Without a compromise on federal tax conformity, Minnesota residents will be left with a higher tax burden and a more complicated tax code.

These high taxes are hurting our state’s economy. With its high personal tax rates, Minnesota’s government is driving productive workers and entrepreneurs out of the state. With its high corporate taxes, it is depriving the state’s workers of the tools and venture capital they need to become more productive. All this exacerbates our existing problem of below-average labor productivity. For the sake of its continued prosperity, Minnesota needs to change direction.