MMB projections show continued decline in the cost of government over the next five fiscal years
ST. PAUL, MN - Governor Mark Dayton and Minnesota Management and Budget (MMB) Commissioner Myron Frans today announced the findings of a new report that shows the Price of Government in Minnesota has fallen 11.7 percent over the last twenty years. That means Minnesotans are paying less, as a share of their incomes, for state and local government services than they were twenty years ago. Based on current projections, that trend is expected to continue, with the price of government forecasted to decline over the next five fiscal years.
Today, for every dollar Minnesotans earn, they pay 15.2 cents in state and local taxes. By contrast, when the Price of Government law was enacted in 1994, Minnesotans paid 17.9 cents in state and local taxes for every dollar they earned. On average, the historical Price of Government has been 16.1 percent of personal income. MMB projects the Price of Government will decline over the next five fiscal years, reaching an estimated all-time low of 14.6 percent in FY2019.
"This Price of Government report demonstrates that Minnesotans are paying less of their income for public services like public safety, health care, and veteran services," said Myron Frans, Minnesota Management and Budget Commissioner. "This aligns with our efforts to help family budgets by offering high quality, efficient government and smart investments that support economic growth."
The attached graph demonstrates the decline, over time, in the Price of Government, and the projected decline over the next five fiscal years. If current projections hold, Minnesotans will pay less than ever, as a share of their incomes, for state and local government services.
About the Price of Government Report
The state's "Price of Government" report measures the cost of all general government services provided by state and local governments across Minnesota. It serves as a financial index for the cost of public services statewide. The report is comprehensive, and includes nearly all revenues collected by state and local units of government, as well as public school districts, including:
- Individual income taxes
- Property taxes (local non-school, school district, and state)
- Local non-tax revenue (electric/water/sewer bills, charges for local government services, etc.)
- State general sales taxes, including state outdoor heritage, parks and trails, clean water, arts and cultural heritage funds
- Post-secondary tuition
- Corporate income taxes
- State fees and charges
- Motor fuels taxes
- Motor vehicle license fees
- Motor vehicle sales taxes
- Tobacco product taxes
- Health care taxes
- Local sales taxes
- Insurance gross premiums tax
- Deed and mortgage taxes
- Alcoholic beverage tax
- Estate tax
- Gambling tax
- Occupation tax
- Other state and local fees/charges
The price of government calculation does not include federal taxes.
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