Joe Sixpack and the Legislature

By Joe Spear
Free Press Editor

By Sunday, there is likely to be a deal to balance the state budget with the hope the feds will come through with about $400 million and once again our representatives will have become creative with some of the accounting.

How does this all play out for Joe Sixpack? Well, his income taxes are not likely to increase, but he will continue to pay higher property taxes, $3 billion more by some estimates over the  last few years. The governor doesn't directly raise property taxes, and you can scream at City Hall all you want, but most cities aren't the ones on a spending spree. Property taxes go up because: 1. cities can't reduce costs at the same rate they lose state aid, and 2. property values are down in a recession.

Joe Sixpack might find himself paying more sales tax - cities may be given authority to do it based on previously mentioned cuts in their state aid - so he pays one way or another. JS may be paying more liquor tax as Republican legislators appear to be open to that, though the governor is still not.

They might be willing override - House would need only three votes - and they may feel a little more confident since the guv wouldn't be around to exact retribution on anybody.

Repub legislators, especially in rural areas, may be more open to liquor or sales taxes because the alternative of cutting health care for poor and MinnCare would fall disproportionately on outstate residents and outstate hospitals.

The $400 million from the feds is key and would come as part of the Health and Human Services bill. Minnesota would still need to pony up $188 million to get that, and Dems point to assessments on hospitals, who - in an kind of odd twist of logic - aren't against it because it brings them more federal money eventually, later.

But guv doesn't like that option, says it raises health care costs when we're trying to cut them. We think he might be thinking about, as he has suggested in past, taking surplus in MinnesotaCare fund, that comes from current so called "sick tax" providers are already paying. At one time there was about $200 million in the fund.

So in the end, Joe Sixpack will pay more somewhere, though if tax Dems proposed on high income earners would've passed, he probably wouldn't have been affected at all, -- not even his sixpack -- unless of course you believe high earners would cut Joe Sixpack's $30,000 a year job after getting hit with an $5,000 increase in tax bill. Logic escapes me there.

One legislator told me added tax on people earning $200,000 plus would affect 0.8 percent and 0.6 percent of filers in their rural district. MinnCare and health care program for poor affect around 2 to 3 percent of people in outstate Minnesota counties. More are on general assistance medical care.

As an example of who wins and who loses, (Joe Sixpack always likes competitive games), 485 people in Blue Earth County would've paid the higher income tax on wealthy people. Eliminating GAMC would have removed 375 people from health care. About 1,200 people in county on MinnCare.

Dems half of win-win budget deal might be expanded health care coverage through federal Medicaid, would cover 83,000 -- 39,000 on GAMC and 43,000 people on MnCare.

But then again, that's more federal spending, that folks seem to be rallying against.