You know those photos that amusement parks snap as you come down to the end of a log flume or roller coaster?
They catch the rider at a moment when they’ve just been waaay up high, and are in the process of falling waaaaay down, into the water (for the log flume) or back to the end of the ride.
If your only frame of reference isd the photo, you have no idea that seconds later, the riders and their “log” are plowing up a plume of water. But seeing as the tracks head inexorably downward, you know where it’s going.
I have to suspect when a DFLer gets those photos, the response is “You’re not in the water right this second…
According to last week’s budget forecast, MInnesota’s DSA-led DFL has led Minnesota from a nearly $18 Billion surplus to…
…well, the snapshot released last week caught the state’s budget at a $2.4B surplus – but, like that log flume photo, it’s that high because that’s when the snapshot was taken on the way down:
Higher estimates in health and human services and education raise total spending in FY 2024-2027, resulting in a negative structural balance in the next biennium.
That “negative structural balance” could be up over $2 Billion. And that’s provided the economy doesn’t really tank.
Who has two thumbs, predicted this, and is currently typing this post? This guy.
Compare and contrast with Iowa:
Iowa led the “tax-cutting wave” in 2022, with the most comprehensive and aggressive tax reform in the United States. This will gradually replace the nine-bracket, progressive income tax with a flat tax, bringing the top rate, which was close to 9 percent, down to a flat 3.9 percent by 2026. Not only will Iowa have eliminated the progressive income tax, it will also have reduced the top tax rate by almost 60 percent.
Iowa’s corporate tax rate, once the highest in the nation at 12 percent, is also being cut: Starting in January 2024, the corporate tax rate will be 7.1 percent, and the rate will continue to be lowered until it reaches a flat 5.5 percent.
Critics of Iowa’s fiscal reforms warn against alleged “economic recklessness.” Mike Owen, deputy director of Common Good Iowa, a progressive think tank, told the Economist that “a crash is coming” and that programs such as education and health care will suffer as a result.
This doesn’t add up. Thanks to fiscal prudence, Iowa’s budget is in strong shape. For the last few years, Iowa’s budget has been in surplus, ending fiscal year 2023 with a $1.83 billion surplus, which was $86.3 million higher than originally estimated. The fiscal year 2024 surplus is projected to be $2.12 billion, rising to $2.99 billion in the fiscal year 2025.
Common Good, like the rest of the non-profit/industrial complex, is getting less official graft out of the state.
No such problem in Minnesota.
Yet.
Also worth noting is that MInnesota’s DSA-led DFL effed up the rebate which was not only be a tenth as large as promised but will also be federally taxable (those 1099s are at the printer).
It looks like you lucky folks in MN will be staring a significant marginal rate income tax increase in the face by Memorial Day, along with a pleasant boost to the property tax rates. Lucky folks to have such caring political masters.
It always astounds me that liberals especially always forget the lessons of Joseph in Egypt; you use the fat years to prepare for the lean. The DFL seems to have the idea that you eat up the fat cattle in the good years and watch out for the lean ones later.
More than one reason it’s called the Laffer curve.