The problem of overspending isn’t just anecdotal, it is systemic.
Minnesota is at a crossroads. For years, key indicators of well-being and competitiveness have been declining. It is not yet too late to turn things around, but if the decline continues, Minnesota will reach a point of no return.
Start with crime. Throughout its history, Minnesota has been a low-crime state. That is one of the reasons why many of us chose to live here in the first place.
But today, in the wake of unprecedented murders, carjackings and other violence, Minnesota has officially become a high-crime state. We are now above the national average in per capita serious crimes, ranging from arson to murder. We are also higher than the national average in total property crimes. And this trend toward lawlessness didn’t start with George Floyd. In 2018, when the national crime rate was falling, felonies were spiking upward in Minnesota.
Why is this happening? Recently, some units of government have failed to support law enforcement and have called for defunding the police. That is why American Experiment erected 100 “Support Our Police” billboards and collected 44,000 petition signatures in support of local law enforcement.
But the problem goes deeper. Its roots lie in Minnesota’s criminal justice system. Our sentencing guidelines are too lenient, and on top of that, too many prosecutors don’t want to prosecute, and too many judges don’t want to send violent criminals to prison. That is why American Experiment has launched our “Criminal Injustice” site, shining a light on prosecutors and judges — elected public officials — who refuse to do their duty by enforcing our laws. And we are working to achieve “three strikes” legislation for violent crimes committed with firearms, a measure that 65 percent of Minnesotans say they favor.
Public education is also in decline. Decades ago, Minnesotans were proud of the state’s public schools. But those days are gone. For many years, we have spent more on K-12 education every year, with per pupil expenditures up 75 percent since 2003. Yet instead of getting better, our results, objectively measured, have gotten worse.
This longstanding decline has been aggravated over the last two years by union-imposed shutdowns of the public schools. As a result of schools failing to serve their clients — parents and students — 2021 saw a catastrophic collapse in student test scores.
Then we have the achievement gap. Not only do Minnesota’s black and Hispanic students underachieve compared to Asian and white students, they also do more poorly than minorities in other states. Black and Hispanic public school students in Mississippi significantly outperform black and Hispanic students in Minnesota in both reading and math, and Mississippi’s scores are getting better while ours are getting worse. And Mississippi achieves better results with far less spending.
This is why American Experiment is working to break the power of the teachers’ union, which stands in the way of all education reform. This is why American Experiment has been working for real school choice for 30 years and leads the fight to oppose the substitution of Critical Race Theory for solid instruction, and the watering down of our state’s standards for K-12 education.
Minnesota once had a strong economy, too. Unfortunately, in the 21st century we have failed to keep pace. Since 2000, Minnesota’s economic growth has been below the national average. The same is true of the Twin Cities metro area. Our economists identified the twelve Metropolitan Statistical Areas that, in 2000, had gross domestic products closest to that of the Twin Cities. That creates a peer group of 13 metro areas. How have the Twin Cities fared in comparison with those peer areas in the following years? Poorly. The Twin Cities area rates 11th out of those 13 metropolitan areas in 21st century economic growth — losing to, among others, Baltimore.
Minnesota is also a low-productivity state. Whether measured by the hour, the year, or the job, Minnesotans’ labor produces around six to seven percent less than the national average. This is largely because of our failure to develop high-productivity, high-income jobs in industries like mining and information services.
Whether we like it or not, other states are competing with us for good-paying jobs and high-productivity citizens. In the 21st century, Minnesota has not fared well in this competition. Using the Internal Revenue Service’s vast database, our economists are able to trace the movement of residents between Minnesota and other states. The pattern has been consistent over a number of years, and is alarming.
Minnesota gains residents from other states, on net, only in the income category from $0 to $25,000. We break even in the range between $25,000 and $50,000, and we lose residents, on net, in every income category over $50,000. Minnesotans sometimes agonize over whether we are losing “the rich” to states like Florida. Of course we are, but that is the least of our problems. The reality is that Minnesota is not creating enough solid, good-paying jobs to attract our share of skilled, productive residents.
Why is Minnesota doing so poorly? Our economists identify high taxes as a key impediment to growth. Minnesota has the sixth highest overall tax burden in the U.S., the fifth highest top personal income tax rate, the third highest corporate income tax rate, and is one of the few states that still impose an estate tax. The list goes on and on. The data show conclusively that our high taxes are strangling our economy.
This is why American Experiment has launched one of our biggest campaigns ever: It’s Our Surplus, Give It Back. As a result of overtaxing its citizens, Minnesota now has a projected $9.3 billion surplus for the next biennium. This creates an unparalleled opportunity for deep, permanent tax cuts that will help to restore Minnesota’s lost competitiveness. Through our writing, through social media, emails, billboards, radio ads, videos and more, we are spreading the word that the legislature needs to give our surplus back to the taxpayers in the form of lower taxes. Our campaign will culminate in a “Give It Back” rally at the state Capitol on April 23. Bear in mind that if the surplus is spent in the coming biennium, it will be part of the permanent budget and we will spend it again in the next biennium, with a percentage increase.
One area where Minnesota has gone out of its way to shoot ourselves in the foot is energy. Historically, Minnesota had low electricity costs. That was a rare competitive edge in a state where some costs are inevitably higher than average. But as a result of Minnesota’s commitment to wind and solar energy, that advantage has been lost — and every Minnesotan suffers as a result. In fact, the price of electricity has been growing here at two and one-half times the national average. Thus, American Experiment has testified repeatedly before legislative committees and has campaigned relentlessly for affordable, reliable energy.
At this moment in history, we stand at a crossroads. Our state has declined badly in many respects, but it is not too late to recover, and in some ways we have great opportunities before us. But Minnesotans must choose the right path. The hour is late and the time is short.