All Things Public, Vol. 1: A (New) Newsletter on Taxes and the Public Good
A random picture of the capitol in 1904 because I didn’t know what else to use.
We have been toying around with the idea of a We Make Minnesota newsletter or listserve for a few months, and today is the day we give it a try!
The idea is to create a forum for news, resources, and ideas related to the coalition's mission of funding the public goods and services that help Minnesotans and their communities thrive. We’re aiming for two posts per month, doing our best to balance worthy content and unnecessary traffic. Will we eventually figure out some appealing design to make this easier on the eyes? Maybe. Will we adhere to a regular schedule? Almost certainly not. Will we scour the earth for interesting ideas and creative examples of the value of taxes and public investment? Absolutely, 100% yes!
With that preamble, here are our top items for this first edition of All Things Public [*working title, accepting suggestions*]:
Hopeful Forecast Feelings
The November forecast showed a $2.4 billion surplus for the end of the 2024-25 budget, which will fall to a $82 million surplus at the end of 2026-27. The GOP called this a deficit; MMB insists it is only a structural imbalance. The upshot is that, at current projections, the state will spend more money than it takes in over the next four years, but cover it with savings. That could mean deficits eventually, but a lot will change between now and the next budget cycle, and I am feeling hopeful for a few reasons:
Technical Reasons: Revenue estimates typically prove pessimistic (the budget picture tends to improve), and the $82 million ending balance for '26-27 is actually $962 million when we count the $880 million taken out for inflation. And that's looking four years out, which most states don't do.
Substantive Reasons: This forecast also has a lot more baked in. Most importantly, automatic inflationary increases in school funding mean that a large portion of future K-12 spending is already accounted for, so any future surplus or increased revenues in 2026-27 will go a lot further than in the past because we won't be digging out of an uncovered rise in education costs. We also have the largest reserves in state history and a AAA credit rating. So don't be fooled; Minnesota's fiscal picture is strong.
Socioeconomic Reasons: Historic 2023 investments have yet to really show up. In the coming months and years, billions of dollars of tangible benefits — from infrastructure to school funding, to care worker raises — will take seed throughout the state, improving the well-being of workers and families and strengthening communities across the state. If we believe in (at least most of) the budgetary choices that were made, then we should have confidence in the future.
Moral Reasons: Increased costs come from anticipated increases in take-up of valuable services like free school meals and healthcare assistance. That's a good thing; it means we are helping people who need it and in the long-run, it will pay off.
Fall-Back Reason: We Make MN's founding analysis is that we are under-investing in public goods and services. If we do end up with a deficit in future budgets, that will just be a reflection of public investment having increased. If that happens, it's because more of our needs are being met, and if Minnesotans feel that (directly or indirectly), then we will be in a good position to defend those investments and fight for more. That's why our coalition exists and why so many of you do what you do.
AFSCME County Workers Delivering for the People
I also wanted to recommend a very powerful Star Tribune series on the state of Child Protective Services in Minnesota. The series documents heartbreaking challenges in human services, and discusses the role of addiction in creating unsafe conditions for children. It is an excellent illustration of how drug use, housing insecurity, and other unmet needs compound, resulting in cyclical harms as well as larger burdens on public service providers. However, on a more uplifting note, the third installment highlights a recent turnaround in Hennepin County. After increased investment in their AFSCME workforce, Hennepin has seen a dramatic reduction in caseloads and repeat abuse. The article also highlights new alternative programs that have social workers connect families in need with resources like housing, food assistance, and addiction treatment. After the horrors of the first two installments, this one is a really inspiring read.
When we talk about public services, it is easy to describe them as faceless bureaucracies. Then they become that much easier to vilify and abandon when they are struggling. But the series is a great reminder that public services are really just workers employed to serve the public. If they are equipped to succeed, then most often they will. The article ends on an important note, which Rep. Nathan Coulter highlighted in a tweet: The success of these programs can continue only with stable, ongoing funding.
It's a good reminder of why we fight for adequate revenue and a strong budget. Kudos to these AFSCME workers and all the union staff fighting so they can do their jobs effectively.
Migration Misdirection
Lastly, Peter Callaghan ran a piece on "tax migration" — the idea that people might be leaving Minnesota (or not moving to Minnesota) because our taxes are relatively high. This is a perennial talking point of the GOP and, as the article points out, it always will be. The article offers a fair description of the debate and I offered some quotes, but unfortunately none of my more pointed criticisms made the cut. I tend not to write on the subject because calling attention to it only favors the baseless talking points, but here's what I want everyone to know on the subject:
As the article describes, the debate about tax migration rests on thin evidence. Yes, Minnesota has been losing net population to domestic migration in recent years, but those patterns shift and there is little proof that taxes are the driving force. Higher taxes and investment is also what creates a strong economy and an affluent society to begin with. As I have repeatedly written, Minnesota has had both the strongest economy and the highest quality of life in the Midwest for several decades. So, if our relatively higher taxes are the defining factor of our society, then we have them to thank, not to blame.
Having said that, long-term population decline is a real threat for the country and for the Midwest in particular. We should be thinking about migration and the value that Minnesotans get for their tax dollars, but that is more about improving services than cutting investments. For example, as this Strib article points out, one real migration problem is a net loss of college students to other states. Ensuring high quality, affordable higher education isn't just good for students and state workforce, but a potential motivator for in-bound migration. Becoming yet another tax haven like South Dakota, Ohio, or Iowa (cold Texas, if you will) is a losing bet.
Minnesota is a true outlier...but not in the way the other side likes to say. The more I talk with revenue advocates from other states, the more it seems like we are the only state in the country with any sort of pro-revenue, anti-austerity politics. In one sense, that places the burden on us to prove the value of the 'high road' but in another sense, it offers us a very wide lane in which to differentiate ourselves from other states that are cutting school funding, divesting from healthcare access, and allowing their infrastructure to fall into disrepair.
Ok, that's enough for now. Thanks, happy holidays, and all my best,
