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Fairmont leaders want to return tax dollars here

August 30, 2012
Gary Andersen, Lee Smith , Fairmont Sentinel

People who live in Fairmont and the businesses located here pay taxes to the state of Minnesota. The purported reason is so the state can provide services that otherwise would not be provided. The premise is sketchy, of course. Who's to say what locals might be able to fund on their own if their money stayed here? But setting the critique aside for a moment, let's acknowledge that citizens who pay taxes to the state deserve a fair return on their "investment." That is, they deserve to see their tax dollars used for quality roads, schools, public safety, etc. Namely, the things state government says it will provide.

One big issue in outstate Minnesota is the amount of state aid provided to cities and counties. Essentially, this is all just a shuffling of money from one pocket to another. The state collects taxes (from citizens and businesses), then hands it out to local governments that are trying to provide services to citizens and businesses. Wouldn't it be easier for people simply to pay taxes to their local governments? Yes.

But there is an added wrinkle in the fact that state aid also can be a wealth transfer, namely from richer cities and counties to poorer ones, i.e. from wealthier people to poorer people. Some places in the state are so poor that they couldn't provide basic services without state aid.

Cities and counties are not wrong to try to obtain state aid payments that are reasonable. By reasonable, we mean not excessive.

City leaders in Fairmont this week said they would like to join a coalition of outstate cities that lobbies to protect and preserve state aid. We don't find this too objectionable. We believe our city leaders have citizens in mind as they try to maintain local services. However, larger questions about this tax transfer system remain. It certainly seems to have problems in terms of efficiency and fairness.

 
 

 

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