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Skip Humphrey: Taxes
By Laura McCallum
August 4, 1998
Click for audio RealAudio 2.0 14.4
Part of Election '98

SKIP HUMPHREY HAS BEEN CRITICIZED by some of his DFL opponents for not being specific enough about taxes and spending. Today, he released a detailed budget plan that cuts taxes by $1.4 billion over four years - a mix of income tax cuts, property tax relief and tax credits aimed at working families. Humphrey says the state can afford to cut taxes, given the budget surplus and tobacco settlement, and he says his budget is prudent.

Humphrey: I know that I've been attacked, saying that we're spendy and that we're gonna blow the budgets and all the rest, and I want you to make sure you take a look at all of the numbers here. They work and they fit. And I frankly think that this is a more detailed budget than anyone else has put forward, and it does work.
Humphrey's running mate, Senate Majority Leader Roger Moe, says he's balanced state budgets for more than twenty years, and the numbers add up. The two are calling for an across-the-board permanent income tax cut, which works out to an estimated $100 a year for a typical Minnesota family. They're proposing $340 million in property tax relief for homeowners and renters, and a series of targeted tax credits. Families could get up to $1000 per child for day care, up to $1000 per student for two years of college, and up to $500 to care for an elderly family member at home. Humphrey says that's what Minnesotans are asking for.
Humphrey: We know from what we have heard time and again, that the challenges are in the families where there are young children, where there are students that are ready to go to college that are really hard-pressed to find the dollars to continue that effort of education, and where families - more and more - are finding that they are taking care of their parents.
Under Humphrey's proposal, employers could also get tax credits for training workers.

To balance the budget, Humphrey says the state could cut $55 million over two years in unspecified government waste, and save another $465 million by cutting "unrealistically high" inflation assumptions. Current budget forecasts assume more than 2 percent inflation a year - Humphrey's plan only allows for 1 percent inflation. Still, Senator Moe says their budget is responsible because it sets aside 5 percent of expenses into a rainy-day fund to protect taxpayers from an economic slowdown.

Humphrey: And so we have in place, we think, an adequate cushion based upon some economic correction. Now, let's be candid. Obviously, all of us want the economy to continue to have modest growth, and so we're working off of Department of Finance's numbers. This budget is balanced.
Moe says anyone can simply propose across-the-board tax cuts - a possible jab at DFL opponent Doug Johnson, who's calling for a permanent income tax cut. Moe says the Humphrey budget tries to prepare for the state's changing demographics, including an increase in elderly residents.

Doug Johnson today called Humphrey's plan "Santa Claus" economics, saying it relies too heavily on tax credits rather than cuts. Another DFL candidate was also quick to criticize the plan - Ted Mondale, who wrote a book outlining his spending priorities, says Humphrey's budget lacks credibility because it doesn't pay for a number of Humphrey's spending promises, such as fully funding Head Start. A Humphrey aide says the budget includes a new child fund that allows each community to decide whether to put more money into Head Start, all-day kindergarten, or other children's programs.