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Pioneer Editorial: Senate DFL plays politics with tax hike

The state of Minnesota has a budget surplus of $2 billion, and Republican Gov. Tim Pawlenty has proffered a biennium budget which provides for a 9.3 percent increase. Yet, the Minnesota Senate, led by Democrats who until now crafted a budget with...

The state of Minnesota has a budget surplus of $2 billion, and Republican Gov. Tim Pawlenty has proffered a biennium budget which provides for a 9.3 percent increase. Yet, the Minnesota Senate, led by Democrats who until now crafted a budget within the same revenue targets, on Saturday approved nearly $1 billion in new state income taxes that will place the state's wealthy in the category of having the nation's highest tax bracket.

Oh, that's right. Today is April 1 -- April Fools!

Sadly, that's not the case. No fooling. The Senate DFL passed a tax hike that they know will go nowhere -- it's DOA before the gavel dropped. Pawlenty, who continues to stand by "no new taxes" even though he didn't sign a pledge this time around, will surely veto such a bill if it ever reaches his desk. And he should. Minnesota doesn't need to move in a direction where it's No. 1 in any kind of tax.

As much as the Democrats will deny it, there's politics at play here.

The governor needs to back off from his pledge, as a good case for raising taxes can be made given the pent-up demand for needed services that suffered under years of deep state budget deficits. There is a $2 billion surplus, but half of it is one-time money that really shouldn't be applied to ongoing programs. And the other half will barely cover inflationary increases. Obviously, new revenue is needed.

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The DFL has outlined a compelling case in a number of areas for needed investment, from early childhood to transportation funding to property tax reform. But priorities must be set, and we need to make investments with what we can afford -- and can justify as worth any extra expense.

Instead, the Senate DFL laid back, preferring to craft a budget so tight that lawmakers hoped there would be a hue and cry among Minnesotans that we must invest, therefore we must raise taxes. In two days' time, a new package to fund nearly everything appeared, one that flies in the face of the governor's veto pen and which passed by such a slim margin that any veto would never be overridden.

Now the politics. Gov. Pawlenty won't waste time with his veto pen, and the DFL Legislature will be back at the drawing board, now with only a month or better to find a compromise. By setting such a high mark, DFLers are betting that Pawlenty will cave in with a lower tax hike as middle ground, but nonetheless a tax hike.

The question will be if the current outrageous tax hike will backfire, and the governor only becomes more firm in holding his post against any tax hike. Then we'll wonder if it might not have been better to start with a more honest and reasonable "investment" package and use public opinion to convince Pawlenty to sign on.

With lawmakers at home this week, they should at least get a dose of reality from constituents.

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