A statewide ballot question will ask voters if the Minnesota Constitution should be amended to increase the state’s sales tax by three-eighths of 1 percent for the next 25 years.

The increase would dedicate funding to the following areas: drinking water sources, lakes, rivers, streams, and groundwater (33 percent); natural areas and wildlife, including wetlands, prairies, forests, and habitat for fish, game, and wildlife (33 percent); parks and trails (14.25 percent); and “arts, arts education, and arts access and to preserve Minnesota’s history and cultural heritage” (19.75 percent).

If approved, the increase would bring in $276 million per year, based on estimates by the Minnesota Department of Revenue for 2011, said Susan Von Mosch, fiscal analyst for the state’s senate tax committee. Revenue from the amendment tax increase would fluctuate with annual sales tax revenues, making the exact dollar-amount impossible to calculate. “It’s not necessarily always the most stable tax, especially with the economy,” said Von Mosch. Tax-revenue estimates are recalculated every two years.

Based on 2007 data, the tax increase would cost $55 a year for a family of four with a $50,000 income, said Von Mosch. (The state median income for 2007 was $56,000.)

Other estimates of the sales tax increase numbers by groups lobbying for and against the amendment vary from the state’s estimates. Vote Yes for MN, a pro-amendment group, claims that $302 million a year will help protect the state resources. The group says Minnesota’s strong heritage of water, wilderness, wildlife and culture must be protected for future generations. They point to polluted waters and loss of wildlife habitat, farmland and wilderness areas; as well as dwindling funding for water, parks, and wildlife habitat. Cultural and arts education, states the group, are not only important for future generations but for our state’s well-being, such as in the area of tourism.

The Taxpayers League of Minnesota, which opposes the amendment, claims that $11 billion of taxpayer money would be “given into the hands of government” over 25 years. (That estimate is almost twice as high as the state’s estimate.)

The Taxpayers League opposes the amendment because it raises taxes. The league also called the use of a constitutional amendment to direct tax revenues an “abuse” that would create a “scary precedent.” (It would, in fact, be the first time such an amendment was put into effect, said Peter Wattson, senate counsel for the State of Minnesota.)

TheTaxpayers League furthermore bemoans that the amendment would mandate where the money will be spent, rather than let the Legislature decide during through its regular, two-year budget. The league said the dedicated funds would constitute a “slush fund” for nonprofit organizations, from which taxpayers could not “follow the money.”

last revised: October 21, 2008

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