Common Cents

2. Common Cents About Common Cents • Part of Bush Foundation’s “Prospects and Possibilities” project to hear from citizens in Minnesota, North Dakota and South Dakota • Share information and perspectives about Minnesota’s fiscal situation • 30+ workshops around the state • Findings will be presented to new governor, legislature and the public

3. Common Cents About the Citizen’s League • Nonpartisan nonprofit for 60 years • Vision is to create the common ground where “we the People” can achieve the common good • Principle: People who are affected by a problem should have the opportunity to define it and weigh in on how it’s solved

4. Common Cents Why We Are Here Charge: Give guidance to the Bush Foundation and public officials on how to address our long-term budget problems • Better understand the trends and challenges facing Minnesota’s budget • Share your vision and values • Provide input on your priorities • Inform the Bush Foundation’s work

5. Common Cents Why We Are Here 5) Model meaningful civic discussion on important issues --expect disagreement --mixed views at tables --feel free to respectfully disagree

6. Question #1 – For you personally, what makes Minnesota an attractive place to live today? (choose two) • Natural resources • A highly educated population • Racial and cultural diversity • Sports/cultural attractions • Good jobs • Ethic of concern for one another • Quality of life in communities • My family and friends • Four seasons

7. #2 – The state has had a history of recurring budget shortfalls. Why do you think that is? (choose two) • The economy • People want more then they’re willing to pay for • Special interests are too influential • Short-term political decisions ignore long-term fiscal problems • Government is inefficient • Tax & spending structure doesn’t match today’s economy. • We haven’t raised adequate taxes

8. State General Fund, FY10-11: $31 Billion Source: Minnesota Management & Budget

9. State Spending in Total, FY 10-11: $60 Billion Does not include capital spending. Source: Minnesota Management & Budget

10. Over Next 25 Years, State Spending Will Outpace Revenue Source: Budget Trends Study Commission Report, 2009. Source: Analysis from Minnesota Management & Budget (MMB)

11. Why Is This Happening? Minnesota is aging Labor force growth is slowing

12. Population 65+ is Increasing Dramatically Source: Bush Foundation. MNCompass from U.S. Census Bureau and State Demographic Center Projections.

13. Minnesota Workers Will Have to Support More Dependents Source: Budget Trends Study Commission, 2009.

14. Four Options to Balance the Budget • Spending (service) cuts • Higher taxes • Economic growth–grow the tax base • Make government services more cost-effective

15. Spending Common Cents

16. Total MN State and Local SpendingSlightly Less than US Average (2008) Per $1,000 of Personal Income. Source: Bureau of the Census, Survey of Gov’t Finances, 2008.

17. Spending on Medical Care is Largest Piece of HHS Budget

18. MN Poverty Rate Below National Average

19. Elderly Population in Need of Long Term Care Will Grow Significantly Costs projected to grow from $1 billion of state budget today to $5 billion by 2035; MN taxpayers pay half of these costs.

20. K-12 per Pupil Spending Increased by $2,000 Shown in 2006 Dollars. Source: Minnesota Department of Finance.

21. Higher Education State Appropriation per Student Has Decreased While Tuition Has Increased Adjusted for inflation (2000 dollars). Source: Bush Foundation. State Higher Education Executive Officers.

22. $1.5 Billion Spent on Reducing Property Taxes in 2010 Source: Minnesota Management & Budget

23. #3 – Over the next ten years, where would you spend LESS state money? (choose up to three) • K-12 education • Higher education • Long-term care for the elderly • Income assistance • Health care for the poor • Property tax aids • Public safety • Other • None of the above

24. Common Cents Taxes

25. MN State & Local Taxes 11.4% of Household Income (2011 est.)

26. Different Taxes Have Different Impacts Effective Tax Rate by Population Decile, Total State & Local, 2006 Source: Minnesota Department of Finance, Tax Incidence Study, 2009. Table 1-6.

27. Total MN Taxes Slightly Higher than US Average Total State and Local Taxes (per $1,000 of personal income) Source: Bureau of the Census, Survey of Gov’t Finances, 2008.

28. #4 – Under what circumstances, if any, would you personally be willing to pay higher taxes?(choose up to two) • If it’s clear we get more for our money • If the overall tax structure is fair • For certain services only • For certain types of taxes only • I’m willing to pay more given the budget situation • I am not willing; I am taxed enough • Other

29. Common Cents Economic Growth

30. Economic Growth = • Labor Force Growth + Productivity Growth • Labor force growth comes from • Natural growth • Migration • Productivity growth comes from • Private investment—technology, machines & processes • Public investment—roads, bridges • Technology from research, public & private • Skills & abilities of workers—education & training

31. MN’s Economy Has Historically Done Well Per Capita Real GDP, MN and US, 1997-2008

32. Migration Will Become the Only Source of New Workers in Minnesota Net Labor Force Growth Source: Minnesota State Demographer (projection revised 2007)

33. National Mobility Has Fallen To Its Lowest Point Ever Recorded Source: Tom Gillespy, State Demographer. Census Bureau, 2008 CPS and historical

34. Avg MN High School Graduation Rate Better than US Avg Source: National Center for Education Statistics (U.S. Department of Education)

35. 69% of MN Job Openings Will Require Post-Secondary Education, 2008-2018 45% of MN's population age 25-64 had an Associates' degree or more in 2005-07, compared to US average of 39%. Source: The Georgetown University Center on Education and the Workforce

36. MN Ranks High in % of Population with Post-Secondary Education Source: Minnesota Office of Higher Education. Note: Data collected during calendar years 2005, 2006 and 2007 for populations of 20,000 of more. Source: U.S. Census Bureau, American Community Survey.

37. #5 – In the near term, I would find room in the state budget for these priorities to achieve more economic growth: (choose two) • Reform the tax structure to encourage investment in productivity • Raise the overall level of K-12 educational achievement • Increase % of population with higher education • Attract new workers, including immigrants • Invest in infrastructure to increase productivity. • Invest in research and development to increase productivity. • Job training to increase productivity. • None of the above

38. Common Cents Reform

39. Reform Can Be Stalled by the Following • Loss of jobs • Consolidations that closing places people identify with (e.g., nursing homes, schools) or replace their elected officials (e.g., local to regional park districts) • Risk of misuse of funds (e.g., military cash cards) • Perceived or real diminution of services • Possibility of failure

40. Main Types of Reform • Consolidation • Competition • Choice • Eliminate red tape • Incentives

41. #6 – How do we best overcome the barriers to reform? (choose up to two) • We shouldn't; the concerns are legitimate. • Our public leaders need to make the tough choices. • Our public leaders should involve citizens more as they develop reform proposals. • We need a bi-partisan or nonpartisan approach so that people have more confidence in the proposal. • Minnesotans need to better understand that public services can't stay the way they are and still be affordable. • Other

42. Common Cents Group Exercises

43. PrioritiesHistorically, Minnesota has been described in the following terms. Compared to how things are today, how much priority should we place on each of these over the next 10-15 years? (1=much smaller priority; 3=same as today; 5=much greater) • High quality of life • Protected natural resources • Strong economy • Well educated • Competent and innovative government • Generous with people in need • Healthy people • Other

44. Given your table’s priorities, what strategies do you think are the most important for the state to pursue to balance the budget over the next 10-15 years - spending cuts, reform, increased taxes? • K-12 • Higher education • Long-term care for the elderly • Health care for children, poor and disabled • Income support • Property tax credits and aids • Public safety • Other • Across the board

45. #7 – What do you think is most important for good budgetary decision-making as Minnesota moves forward? (choose two) • Community conversations like this • Better public information about spending and outcomes • Lower public expectations about services • We Minnesotans all need to be willing to shoulder some burden • Public officials who are better leaders of difficult change • Other

46. Common Cents Demographics

47. #8 – What is your gender? • Male • Female

48. #9 – How old are you? • Under 18 • 19 – 35 • 36 – 50 • 51 – 65 • 65+

49. #10 – What ethnicity best represents you? • American Indian or Alaskan Native • Asian • Black or African American • Hispanic or Latino • Multiracial • White or Caucasian (non-Hispanic) • Other

50. #11 – What political ideologybest represents you? • Conservative • Liberal • Libertarian • Socialist • Moderate • Mix • Other