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Policy Blueprint 2022
The legislature should fight for tax cuts, students, transparent healthcare, and reliable, affordable energy.
Minnesota’s economy is not as strong as some think.
Since 2020, Minnesota has slipped a place, to 46th, on the Tax Foundation’s 2021 State Business Tax Climate Index. This was largely driven by our state’s high corporate tax rates, where we rank 4th highest in the United States, and our individual taxes, where we rank 5th highest. We need to see these rates come down if we want our state to be competitive.
Our latest Thinking Minnesota poll found support for this approach: 24 percent of Minnesotans chose permanent tax cuts as the best use of an expected budget surplus. The poll also found strong support (12 percent) for a one-time tax rebate using the surplus. It turns out the “give it back” message is very popular in Minnesota, no matter which way the legislature decides to go.
Understanding that Gov. Tim Walz has shown no interest in cutting tax rates, there are smaller steps that could move Minnesota from 46th to 40th overall on the Tax Foundation’s index:
Across the country, 11 states lowered tax rates in 2021 for individuals and corporations, including next door in Wisconsin. Democratic Governor Tony Evers signed a budget bill that lowered the second highest rate for Wisconsin income taxpayers from 6.27 to 5.3 percent, retroactive to January 1, 2021. In order to become competitive, Minnesota has to keep pace.
Health Care Costs Continue their Uncontrolled Rise
President Obama consistently argued that the Affordable Care Act (ACA), also known as Obamacare, would lower health care costs, famously predicting it would “cut the cost of a typical family’s premiums by up to $2,500 a year.” He was wrong. Nine years later, America’s health care costs continue to rise uncontrollably.
A key reason costs keep rising is because the system insulates patients from the true cost of care, generally passing along the cost to employers, private insurers, or government programs.
Rising health care costs are at least as much a problem in Minnesota as elsewhere. The average total family premium for employees at private-sector employers in Minnesota rose 48 percent from $13,903 in 2010 to $20,624 in 2020, mirroring the national average.
Minnesota’s Medicaid program also costs far more than most. Medicaid spending per enrollee ranked the fourth highest in the country in 2018. Without any change to federal and state law, costs will continue rise at an unsustainable pace. While Minnesota can’t change federal law, there are a number of things the state can do to improve upon federal law and fix state law:
Bolster Federal Price Transparency. Patients need more information to find health options that are affordable, high-quality, and at a convenient care location. Following recent federal regulations on price transparency, Minnesota should ensure a competitive market that aligns incentives so both high-value providers and their patients benefit.
Repeal counterproductive laws that undermine competition. The pressures of COVID-19 on Minnesota’s health care facilities revealed several laws that restricted them from meeting the challenges of the pandemic, including laws restricting hospitals and nursing homes from adding new beds, and restricting nursing homes from charging private-pay residents more than Medicaid patients. In a series of executive orders, Gov. Walz temporarily waived or modified many of these restrictions which should now be made permanent. This includes permanent legislation to:
Ensure the right people receive the right benefits at the right time. Minnesota’s public welfare programs repeatedly fail integrity audits. Minnesota’s enrollment systems too often enroll people who are not eligible. Moreover, they are allowed to stay enrolled long after they have lost eligibility due to income or marriage status.
Fighting for Reliable, Affordable Energy
Skyrocketing energy costs have reminded Americans of the importance of reliable, affordable energy, whether gasoline for our cars, natural gas for home heating, or the electricity that powers our lives.
Legislators should fight to help ease the financial burden on Minnesota families and businesses brought on by years of bad energy policy. These reforms include fixing Minnesota’s renewable energy requirements, repealing Gov. Walz’s California car mandates, and changing the way Minnesota regulates government-approved monopolies.
Minnesota’s electricity prices used to be 20 percent below the national average, not only benefiting consumers but giving manufacturing and mining companies a huge competitive edge in our state. But Minnesota’s electricity prices have risen 2.7 times faster than the national average since our renewable energy mandate, the Next Generation Energy Act (NGEA), was signed into law in 2007.
To fix these problems, American Experiment has proposed the Clean Energy Freedom Act (CEFA), which will make several common-sense and much-needed changes to the NGEA.
For example, the NGEA did not con- sider the hydroelectric power we already buy from Canada to be “renewable” under the mandate. This exclusion has made complying with the mandates unnecessarily expensive. Our polling shows 81 percent of Minnesotans think hydropower should count.
CEFA would also legalize the construction of new nuclear power plants in Minnesota, reversing the state’s unscientific ban on their construction. Nuclear power should be considered the perfect electric power candidate for our state because it provides the reliable, affordable energy that most Minnesotans prioritize, while having the added bonus of not emitting carbon dioxide, which liberals tend to value as a high priority.
Unfortunately, Walz wants to double down on the bad policies that are making our electricity less reliable and more expensive. He wants to enact new energy mandates that would require 100 percent of our electric grid to be carbon free by 2040 without legalizing nuclear power or Canadian hydropower.
Policymakers should also pressure Walz to repeal the California car mandates that will force Minnesota car makers to stock electric vehicles in our state. Electric vehicles are not profitable, so carmakers will be forced to raise the prices on gas-powered cars to compensate for losses on EVs. Walz’s California car mandates will increase the cost of driving for all Minnesotans by up to $2,500 per vehicle and provide no measurable benefits to the environment.
Lastly, Minnesota needs to change the way our utilities are regulated as government-approved monopolies. Our current Public Utilities Commission (PUC) is filled with Dayton and Walz appointees who prioritize renewable energy sources above reliability and affordability. This is not a reflection of the ideological or geographic diversity of our state.
Making the PUC an elected body, with one commissioner from each congressional district, plus an at-large Commissioner, would make these bureaucrats accountable to the public.
The way electric utilities are compensated also needs to change. Currently, these monopolies are allowed to make a profit every time they build a wind turbine, solar panel, or gas plant, unfairly making ratepayers pay for unreliable wind and solar energy, even though those sources produce electricity less than half the time. American Experiment proposes the “Get What You Pay For” Act, which only allows companies to make a profit on the amount of reliable capacity they build.
Parents should be in control of education, not the cartel
American Experiment will pursue an aggressive education agenda in the 2022 legislative session. A primary goal will be enhanced academic and financial transparency to arm parents with the information they need to hold the education bureaucracy accountable.
Transparency. Legislation requiring school districts to make all teaching and learning materials available to the public on the district’s web site should be a priority. This should include teacher training, expenditures, and school policies and procedures. This transparency measure has the support of 69 percent of Minnesotans in the latest Thinking Minnesota poll.
Combating radical narratives. Classroom use of intellectual components of Critical Race Theory, such as discrimination on the basis of race, sex or other group identities; the teaching of bigoted race and sex stereotyping; and the requirement that students or teachers affirm concepts like systemic racism and gender fluidity should be prohibited.
Promoting school choice and legislative oversight. School choice initiatives should be prioritized in the upcoming legislative session. Any revisions or reforms of the K-12 academic standards should be submitted to the legislature for approval or rejection. The proposed Page Amendment, as well as the use of civics education as training for social justice activism, are tools that do nothing to improve Minnesota’s schools and should not be implemented.
School Board Elections. Finally, aligning school board election dates with the general election in November will strengthen reform efforts by weakening the teachers’ union’s influence in low-turnout municipal elections. Political leaders annually wring their hands looking for solutions to solve Minnesota’s nation-leading achievement gap. Education reform groups come and go, all with well-meaning mission statements. Education Next was formed in 2012 with a star-studded cast of major foundations, city and county leaders, and education experts to “harness the community’s knowledge, expertise, and action to ensure that every child can thrive.” In almost 10 years, they’ve done nothing to close the achievement gap.
What about more money? Things will surely get better when we “fully fund education” as the teachers’ union proposes. The per-student formula in Minnesota increased from $4,601 in 2002-2003 to $6,832 in 2022. And that is before all of the additions for poverty, language, sparsity and 25 other “categoricals” that bring per-student funding to over $16,000 for districts like Minneapolis. Money is clearly not the problem.
Violent crime is out of control in Minnesota
You don’t need to read the statistics to realize violent crime is out of control in Minnesota. But here they are anyway. Just in Minneapolis, homicides increased from 71 to 83 between 2020 and 2021, through October 31, according to the City of Minneapolis Crime Dashboard. Aggravated assaults increased from 2,542 to 2,665, and auto thefts, at 3,261 through October 31, are up from 3,258 in all of 2020.
Some trace the increase in violent crime in Minnesota and the nation back to the death of George Floyd on May 29, 2020. But the real catalyst for the crime wave we are still experiencing was Walz’s lack of response to the riots sparked by Floyd’s death. Walz was silent for two full days while rioting took over Minneapolis, spread to St. Paul and the suburbs, and eventually the entire country. Walz’s silence was a clear message to criminals: go ahead and engage in rioting and lawlessness, there will be no consequences.
The lawlessness continues almost two years later, with no end in sight. Thankfully, the voters of Minneapolis rejected the call to abolish the police, a move supported by the Minneapolis City Council and cheered on by Congresswoman Ilhan Omar and Attorney General Keith Ellison. But that moment of sanity was quickly offset when leaders like Ramsey County Attorney John Choi announced the end of prosecutions based on so-called pretextual stops.
With do-nothing leaders like Walz and crime-abetting prosecutors like Choi, Minnesotans are increasingly concerned about public safety. In a recent Thinking Minnesota poll, 81 percent of respondents said they were personally concerned with the level of crime in Minnesota, with the highest numbers coming from the suburbs. When asked what Walz’s top priority should be for 2022, a majority, 28 percent, said he should work on reducing violent crime.
The first step in reducing violent crime is getting violent criminals off the streets and keeping them in prison longer. A strong three strikes law for crimes committed with a dangerous weapon would be a good step forward and is supported by 65 percent of Minnesotans, according to the latest Thinking Minnesota poll.
But laws are only as good as the judges and prosecutors charged with enforcing them. There is a disconnect in our system with the legislature setting mandatory minimum sentences for certain crimes and the judiciary ignoring them on a regular basis. According to data from
the Minnesota Sentencing Guidelines Commission, judges in Ramsey and Hennepin County deviated from mandatory minimum sentences almost 40 percent of the time in 2019. We need to strengthen mandatory minimum sentencing and limit the exceptions available to judges and prosecutors for not following the guidelines set by the legislative branch. 57 percent of Minnesotans agree, according to the Thinking Minnesota poll.
If cracking down on violent offenders means more criminals in our prisons, 49 percent of respondents to the Thinking Minnesota poll have no problem using state surplus dollars to fund more prison space. Leaders have no excuse not to strengthen our laws and keep Minnesotans safe.