Thursday, February 14, 2008

Constitutional amendment increasing sales tax for environment, water and arts will face tough time in November

The Minnesota House and Senate today passed a constitutional amendment increasing funding for the outdoors, the arts and the environment via a 3/8 of 1% increase in the sales tax. It will go on the November ballot for the voter's to decide.

The proposal while intended to increase funding in these areas may mean reduced general budget for these areas because future legislators will say, we can cut back some general budget arts funding because the arts are getting an extra $54.5 million a year from this constitutional amendment. It won't hurt if we redirect some of those funds to other programs. The same for other areas. The ultimate consequence is merely a tax increase through the constitutional amendment process.

Others have questioned whether it's appropriate to making funding decisions through the constitutional amendment process. It allows legislators to avoid making the tough decision of raising taxes.

I think the most problematic element is arts funding via the government. I think there's a legitimate role for the government to play in protecting the environment but should government bureaucrats be deciding what art receives taxpayer dollars.

I think this amendment may well have a difficult time passing in November. First, in time of economic slowdown, people are less willing to vote themselves a tax increase. And second, under Minnesota's constitutional amendment process, a majority of all votes cast in the general election must be in favor of the amendment not just those cast on the amendment. Often many people don't vote on constitutional amendments; they leave it blank. Those non-votes are treated as no votes. Meaning? For an amendment to pass will require approximately 55% support. That won't be easy for a significant tax increase and the broad reach of the amendment.

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