RESPONSE - Carlson

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#2.  In three parts, outline your vision for the best system of taxation
for the state of Minnesota.

        1.  What is the tax mix today (income, sales, property, etc.)?
        2.  Where would you like to see the mix in the year 2000?  Why?
        3.  What steps or program do you propose to get from here to there?


Governor  Carlson's  response  to question  #2

A recent Minnesota Taxpayers Association report is the latest in a long
series of studies pointing out that  our state and local government fiscal
system is a mess.  We took the so-called Minnesota Miracle too far, trying
to equalize spending capacity on too many things.  Throughout the '70's and
'80's, we never saw a program we didn't embrace or a federal standard we
didn't try to exceed.  During inflationary years, we spent revenue
windfalls like they were lottery winnings.

Now, caseloads in services for the elderly are escalating; concern about
crime has forced us to spend more on prisons, medical costs have been
rapidly increasing, only recently slowing down as a result of aggressive
changes we are making.  Our capacity to invest in our children - in early
childhood, in elementary and secondary school, and in colleges and
universities - is stretched just when we need it most.

We need to build a consensus for a short list of priorities for which the
state will be financially responsible.  I would put education, health care,
criminal justice, and maintaining a safety net for our most vulnerable
citizens on such a list.  At the local level we need to restore the
traditional tension between the opportunity to spend the public's money,
and the responsibility to raise it, and stop depending on the state to
subsidize so many things.

I have put in motion a major examination of the driving forces behind state
spending.  The study, which is being conducted by the Minnesota Planning
Office and will be completed later this year, will lay the groundwork for
meaningful tax reform in 1995.

By the year 2000 I would like to see the total tax burden for the state of
Minnesota reduced or at least held at the current rate.  Since 1991, my
administration has managed to reduce the growth of government spending to
less than the growth of personal income.  However, we must hold the line on
state taxes and make disciplined financial choices.  This will ensure a
bright future for all of our children because reducing taxes will attract
business and jobs to the state.

Over the last four years, my administration has turned an inherited
$2 billion deficit into a $623 million surplus.  This was accomplished
while creating over 170,000 new private sector jobs.  We have made the
tough choices and insisted that the state of Minnesota live within its
means.  We must continue to move along this path if we are to ensure our
future financial success.

The Minnesota Taxpayer's Association report is on target.  The tough
challenge is to build a coalition within the Legislature  to make the
policy changes that are needed.


I would like to ask Sen. Marty a question about the property tax issue.
Many groups on both political sides have studied Minnesota's property tax
system over the past several years and have come to the same conclusion -
that Minnesota's system is arcane and in need of comprehensive reform.
Instead of making another DFL election year promise of more property tax
relief, this time achieved by an income tax increase, why not use the bully
pulpit to reform the system that is draining our state's resources?

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