As Minnesota legislators grapple with the state's $4.2 billion budget shortfall, they will not be able to look to the federal government for help, a new report shows. In fact, the federal budget proposal passed April 11 will cost the state up to $250 million over the next two years.
“The message from Washington is, 'You're on your own, Jack,'” said Wayne Cox, executive director of Minnesota Citizens for Tax Justice.
Cox spoke at a state Capitol news conference along with leaders of several other organizations, including the Minnesota AFL-CIO, Children's Defense Fund Minnesota and the Office for Social Justice of the Catholic Archdiocese of St. Paul and Minneapolis. They released a new report by the Economic Policy Institute and the Institute for America's Future, Washington-based think tanks, that analyzes Congressional budget plans.
The report shows that the state will suffer a sizeable revenue loss, while the plans will do nothing to stimulate the economy, Cox said.
No help for the states
“The current Bush (administration) proposal directs most of its dollars to long-term tax relief to those with very high incomes,” Cox said. If that same money were given in the form of tax cuts or rebates to lower- and middle-income people, it would help stimulate the economy. Giving the money to the wealthy does not stimulate demand and actually harms the economy by driving up the federal deficit, as Federal Reserve Chairman Alan Greenspan has pointed out, Cox said.
Children's Defense Fund Minnesota Director Jim Koppel called the federal proposals the “Leave No Millionaire Behind” plan.
“Nine million children without health care today would all be served as an alternative to that tax cut for millionaires,” he noted.
The federal budget provides no financial relief for the many states facing budget crises. The cuts will aggravate the problem, the speakers said. The cuts include:
- $73 million cut from environmental and natural resources, such as programs to monitor and control air and water pollution
- $51 million cut from education, training, reemployment and social service programs
- $44 million cut from support to low-income families
- $37 million cut from health care, such as immunization programs and grants to states to help with health crises
- $49 million cut from transportation, including funds for highways, mass transit, bridges and airports
- $26 million cut from police and security
- $20 million cut from agriculture, food and nutrition programs
The report notes that the federal tax cut contained in the budget proposals would provide more than $22,000 a year in tax breaks for the wealthiest one percent of Minnesotans, but less than $100 for 44 percent of Minnesota taxpayers.
Ron Krietemeyer of the Office for Social Justice of the Archdiocese of St. Paul and Minneapolis said the federal tax cuts won't work, are unfair and are irresponsible.
“This budget proposal would take away public revenues that should be directed to meeting the social needs of our nation, the needs of the poor and working class families,” Krietemeyer said. “Health care, affordable housing, child care, job training — these are fundamental needs that, both morally and socially, should take precedence over the desires of the rich for more tax breaks.”
For more information
Read the full report issues by the EPI and the Institute for America's Future. Go to http://www.ourfuture.org/issues_and_campaigns/economic_stimulus/2003reports2_13_03.cfm and click on Minnesota.
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As Minnesota legislators grapple with the state’s $4.2 billion budget shortfall, they will not be able to look to the federal government for help, a new report shows. In fact, the federal budget proposal passed April 11 will cost the state up to $250 million over the next two years.
“The message from Washington is, ‘You’re on your own, Jack,’” said Wayne Cox, executive director of Minnesota Citizens for Tax Justice.
Cox spoke at a state Capitol news conference along with leaders of several other organizations, including the Minnesota AFL-CIO, Children’s Defense Fund Minnesota and the Office for Social Justice of the Catholic Archdiocese of St. Paul and Minneapolis. They released a new report by the Economic Policy Institute and the Institute for America’s Future, Washington-based think tanks, that analyzes Congressional budget plans.
The report shows that the state will suffer a sizeable revenue loss, while the plans will do nothing to stimulate the economy, Cox said.
No help for the states
“The current Bush (administration) proposal directs most of its dollars to long-term tax relief to those with very high incomes,” Cox said. If that same money were given in the form of tax cuts or rebates to lower- and middle-income people, it would help stimulate the economy. Giving the money to the wealthy does not stimulate demand and actually harms the economy by driving up the federal deficit, as Federal Reserve Chairman Alan Greenspan has pointed out, Cox said.
Children’s Defense Fund Minnesota Director Jim Koppel called the federal proposals the “Leave No Millionaire Behind” plan.
“Nine million children without health care today would all be served as an alternative to that tax cut for millionaires,” he noted.
The federal budget provides no financial relief for the many states facing budget crises. The cuts will aggravate the problem, the speakers said. The cuts include:
- $73 million cut from environmental and natural resources, such as programs to monitor and control air and water pollution
- $51 million cut from education, training, reemployment and social service programs
- $44 million cut from support to low-income families
- $37 million cut from health care, such as immunization programs and grants to states to help with health crises
- $49 million cut from transportation, including funds for highways, mass transit, bridges and airports
- $26 million cut from police and security
- $20 million cut from agriculture, food and nutrition programs
The report notes that the federal tax cut contained in the budget proposals would provide more than $22,000 a year in tax breaks for the wealthiest one percent of Minnesotans, but less than $100 for 44 percent of Minnesota taxpayers.
Ron Krietemeyer of the Office for Social Justice of the Archdiocese of St. Paul and Minneapolis said the federal tax cuts won’t work, are unfair and are irresponsible.
“This budget proposal would take away public revenues that should be directed to meeting the social needs of our nation, the needs of the poor and working class families,” Krietemeyer said. “Health care, affordable housing, child care, job training — these are fundamental needs that, both morally and socially, should take precedence over the desires of the rich for more tax breaks.”
For more information
Read the full report issues by the EPI and the Institute for America’s Future. Go to http://www.ourfuture.org/issues_and_campaigns/economic_stimulus/2003reports2_13_03.cfm and click on Minnesota.