The T Word: Bakk says Ventura-era tax cuts were a mistake

In wrapping up the 10-minute press conference that followed the introduction of the Senate’s omnibus tax bill yesterday, taxes chair and 2010 gubernatorial candidate Tom Bakk (DFL-Cook) (pictured) was asked why he had chosen to make an income tax rollback to 1998 levels the centerpiece of his plan. His response is worth noting in its entirety, because it amounted to not only a mea culpa but a reminder of how Minnesota got into a structural deficit in the first place:

"I think this is a more straight-up approach. You know, I was in the Legislature in the ’90s when the economy was really humming along. The state was performing really, really well. And we cut income taxes two different times, in ‘99 and in 2000. We cut license tabs. We made a couple different rounds of rebate checks back to people. I believe we had 14 budget forecasts where revenue was coming in higher than we had forecasted it was going to be. It just seemed in the ’90s like the money was never going to quit flowing.

"I would argue that the pendulum swung too far. We made tax cuts that were not sustainable over the long haul. And we have put the state in a situation where the decisions that were made in the ’90s to cut taxes–right up through 2001 when we did the property tax school takeover. We shifted something like $900 million a year off property taxes and into the state’s general fund. Some of the decisions that were made in the ’90s through 2001 over the long haul have not been sustainable.

"In 2002, the state started running deficits. The reason to go back and do a hybrid of the 1998 rates is an admission on my part–I voted for those tax cuts. And now I’m willing to admit they weren’t sustainable over the long run. I remember when the 2001 bill came to the Senate, my predecessor and the former tax chair, Doug Johnson, voted against the 2001 tax bill. Sen. [Larry] Pogemiller voted against the 2001 tax bill. Majority Leader Roger Moe voted against the 2001 tax bill. And they all said, the tax cuts are not going to be sustainable over the long run. And they were right.

"I would argue that the provisions in the Senate bill–go back and take a look at the income tax cuts we made; I voted for them, the governor voted for them. They weren’t sustainable over the long run. The economy did not hold at the level we had back then, and consequently the revenue has fallen off when the economy has begun to [slump]."

6 Responses to “The T Word: Bakk says Ventura-era tax cuts were a mistake”

1. Anonymous Says:
   April 22nd, 2009 at 10:49 am

   As a member of the Ventura Administration, two points are worth recalling. First, if Ventura hadn’t cut taxes in 1998/1999 government spending would have inevitably gone up — and this would only have made today’s already difficult budget cuts that much more difficult.

   Second, in 2002, when Ventura recognized that the state had a deficit he proposed a tax increase in his budget (along with a combination of spending cuts). Who blocked it? Both Roger Moe and Tim Pawlenty.

   Jack Uldrich
   Chair, Independence Party

2. Anonymous Says:
   April 23rd, 2009 at 9:03 pm

   Hmmm; didn’t someone else, who, with Tom Bakk, is a current gubernatorial candidate, vote against those tax cuts? That would be Senator John Marty. But kudos to Senator Bakk for getting it right, if only retrospectively.

3. Anonymous Says:
   April 25th, 2009 at 8:21 am

   When it’s not YOUR money, you will spend it every way possible. When the state of Minnesota had
   budget surpluses, you PEOPLE created new programs and expanded others instead of leaving it in a fund for a rainy day like now. Nobody ever wants thier budgets cut and the media will do its best to make sure they highlight certain cuts to get the people all worked up. Like in business, when times get tough, we business owners make cuts where ever possible, we don’t raise our prices to create more revenue, like you PEOPLE do in raising taxes. Keep taking from the hard working people of this state and before long you will have nothing more to take and we will become a Socialist society. Maybe thats your goal….

4. Anonymous Says:
   June 15th, 2009 at 11:06 pm

   with Tom Bakk, is a current gubernatorial candidate, vote against those tax cuts? That would be Senator John Marty. But kudos to Senator Bakk for getting it right, if only retrospectively. Affordable High School Diploma

5. Anonymous Says:
   June 17th, 2009 at 1:02 am

   others instead of leaving it in a fund for a rainy day like now. Nobody ever wants thier budgets cut and the media will do its best to make sure they highlight certain cuts to get the people all Online GED & Financial Aid for High School worked up. Like in business, when times get tough, we business owners make cuts where ever possible, we don’t raise our prices to create more revenue, like you PEOPLE do in raising taxes. Keep taking from the hard working people of this state and before long you will have nothing more to take and we will become a Socialist society. Maybe thats your goal….

6. Anonymous Says:
   June 17th, 2009 at 2:14 am

   Keep taking from the hard working people of this state and before long you will have nothing more to take and we will become a Socialist society. Maybe thats your goal
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