Friday, June 24, 2011

The State of the State

Things aren’t too good here in Minnesota right now and here are some of my observations about the state we’re in!
by Charlie Leck

Busy food shelves ahead!
This spring’s massive flooding of spectacular farmland along the Mississippi in Illinois and Missouri is going to seriously impact both food supply and food prices in America. In Minnesota, Iowa and the Dakotas, massive and persistent amounts of rain are also taking a toll. Take note: food prices will be high this summer and fall – and probably right through the winter. As we know, they are high enough already. The average family will again need to increase the percentage of their income that goes to food.

Local food shelves will become important institutions in every community across the land. There will be more hungry people. I encourage you to give generously – as generously as you can – to your local food shelf. I’ve found it more sensible to give money rather than food products to our food shelf. That way they can make the determination on what they need to fill their shelves. In our giving, we budget $700 each year for the food shelf. We’re going to try to raise that amount this year to meet the coming food crisis.

Tim Pawlenty’s and Michel Bachmann’s positive national numbers rise!
Oh, my! The 2012 political campaign, which is already underway when we aren’t even half way through 2011, is going to eat away at my stomach lining. How can the American public (at least the Republican portion of it) look favorably on Michel Bachmann as a presidential candidate? I truly believe America must be going crazy! The woman is a lame brain, paranoid and slightly imbalanced. The only thing I can hope is that she will shoot herself in the foot enough times that she will no longer seem an attractive presidential possibility. It is to Minnesota’s shame that we contribute these two politicians for your consideration. I’m sorry!

The great state of Minnesota may shut ‘er all down on July 1…
Our Republican led bicameral legislature and our Democratic Governor cannot agree on a budget for the fiscal year that begins on July 1. That’s the first day of the July 4th weekend. Happy Fourth of July. Our constitution does not allow the appropriation of funds without a fully approved budget. State parks and camp grounds will close down. State highway crews will not be working. The question about state prisons and police services will probably be decided by the courts. What will happen to state mental institutions and homes? What about veteran’s services and homes? How about the state crime bureau?

The blame game has already begun here in Minnesota. Republicans are blaming the Democratic governor and the governor is blaming the Republican controlled legislature. A district judge up here brought the gavel down hard on both of them and told them to stop playing games and get back to the table to negotiate a settlement.

“There will be private businesses that will not survive,” she told the lawyers for both parties and a packed courtroom, “and there will be families who will not be able to pay their mortgages.”

“The courts can’t become the Legislature,” she said at another point and then added: “We can’t become the executive branch. I am not happy about this.”

The judge likened what’s going on up at the state capitol to “a game of chicken.”

Mark my words! If this state government shuts down on the first of July, for even a day or two, the voters will figure out who to blame in the 2012 legislative election races and a lot of people over there in St. Paul are going to lose their jobs.

The Republicans want to dramatically trim spending. The governor sees too many little people and important state projects being hurt by such cuts. He wants to raise taxes on the very highest income earners in the state – a relatively small percentage of people The Republican argument about such tax hikes was clearly made in MinnPost yesterday by Peter J. Nelson (a fellow at the Center of the American Experiment) and John Spry (an associate professor in the department of finance at the University of St. Thomas). I’ll give it to you here in a nutshell but I’ll also state emphatically that I don’t believe it. [If you want to read the entire article, click here!]

According to mainstream economic thought, the trouble with raising state tax rates on a narrow tax base springs from the incentives higher tax rates create for taxpayers to avoid additional tax payments.

“Taxpayers can avoid state income taxes through tax shelters, working less, making fewer taxable investments, or by moving to a lower tax state. Each tax avoidance avenue, in its own way, makes it harder for poor and middle class workers to find well-paying jobs in Minnesota.’

Come on! I just don’t buy it! Most high-income people I talk to are asking for higher taxes because they want to help out in this situation. The legislature can put a sunset clause on these tax hikes and have them end automatically in two years. I’ll gladly give up my golf trip next winter and pay a few more thousand in taxes in order to help out!

The state of the state right now ain’t too good – to put it bluntly!


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