Notes From Norm – The Cost And Effectiveness Of Government

From FY 2004 through FY 2014 the price of state and local revenues as a percentage of Minnesotans personal income fluctuated from a low of 14.7% in FY 2009 to a high of 16.2% in 2006.

For FY 2015 through FY 2017 that percentage of personal income going to government will range from 15% to 14.5%.

During that same period of time overall tax collections on Minnesotans increased from $14.4 billion in FY 2004 to a projected $22.1 billion in FY 2017.

Non-tax revenues, i.e., fees on services, tuition, tobacco settlements, etc, will increase from $2.5 billion in FY 2014 to an estimated $4.1 billion in 2017.

If one combines all of these collections from taxpayers to the State of Minnesota, including federal grants (which still come from taxpayers) the total revenues collected by the state from taxpayers has increased from $22.8 billion in FY 2004 to an estimated $37 billion in FY 2017.

Whew!

But, wait!

That’s just revenues collected by the State of Minnesota.

Local non-school revenues – local and county units of government – have yet to be added into these totals.

From FY 2004 to FY 2017 those tax revenues collected by them will go from $3.5 billion to $6.4 billion.

And, fees and other revenues rise from $4.8 billion in FY 2004 to nearly $7 billion in FY 2017.

Don’t let out your breath yet, though.  The attack on your pocketbook is not yet done!

Overall revenues collected by local school districts rises from $1.8 billion in FY 2014 to $3.3 billion in FY 2017.

Combined together – all government entities in Minnesota – revenues collected from taxpayers will climb from $27 billion in FY 2004 to nearly $43 billion in FY 2017.

This massive increase in collections from Minnesota taxpayers has resulted in a dramatic expansion in the size and scope of government.

Advocates of growing the size of government will seize upon the notion that the actual cost of government to taxpayers will remain constant as Minnesota incomes will undoubtedly climb during that same period of time.

Opponents on the other side will propose that Minnesotans would be able to keep more of their own money if government wasn’t growing every single year.

The Legislative Coordinating Commission has provided the information I cite above at the following link: http://www.commissions.leg.state.mn.us/lcpfp/Meetings/2013/02222013/pogreport-nov12.pdf

As the newly elected House GOP Majority comes to fruition at the beginning of 2015 it would be a good time for a transparent and public discussion over the cost of government to begin.

Equally, if not more important, is that it is time for a serious review about the impact of these revenue collections on taxpayers and job creation in Minnesota – as well as whether we are getting the value for the dollars we are being told to pay to support the government programs that are being added each year in Minnesota.

Much ado is made when corporate America is seen as insensitive to the needs of ordinary Americans when CEOs receive massive pay raises despite the performance of the companies they lead.

It is an understandable angst and one that is legitimate.  The fact is if a company doesn’t perform it begs the question why a CEO should be rewarded for that underperformance with a big fat pay raise.

How, then, do we determine if government is performing well enough to earn the massive increases it receives each and every year?

What metrics are used to determine if programs truly are fulfilling their intended purpose?  What would be the result if they were not?  Who makes the decisions about whether programs are working?

Minnesotans have seen the cost of government rise substantially over the past few years.  They have been assured that these increases are for their own good and that they contribute to the state’s quality of life.

This may or may not be true.  Today, there’s really no way to know if these claims are accurate.

Given the vast amount of money that is collected at every level of government in Minnesota it seems a reasonable step to take to develop a way to evaluate the true cost and effectiveness of government programs.

For those who advocate for an activist government, as well as those who advocate for a more limited government, it would seem that such a review may well help either one of them justify their case.

That’s the kind of bi-partisan “win-win” that all Minnesotans should come to expect from their divided government beginning in 2015.