This Week:

Headline of the Week

East Timor

Tax Cut Consequence of the Week: Money For Jails, Not For Health and Welfare y

Tax Cuts and Tax Rebates: What Are They Costing Us?

Greetings,

Here it's been almost a year and I don't really have a good name to use to refer to readers of Nygaard Notes. Later in this issue I refer to you as Nygaard Notes-ians, but that is clearly not the answer. Nygaardians? Notefactors? Noticeries? I dunno, I may never come up with a satisfactory one. Got any good ideas?

Welcome to the new readers this week. As always, I am glad to add you to the list, and I would love your comments.

Until next week, then, y'know,

Nygaard

Headline of the Week:

"Minimum wage not enough for rent; a national report finds that working poor families can't afford housing."

-- Star Tribune (Newspaper of the Twin Cities!) September 10, page A21

East Timor

The United States bears an enormous responsibility for the current (and past) violence in East Timor. By far THE BEST SINGLE SOURCE OF INFORMATION on the situation in East Timor is to be found on the ZNet site on the Internet, found at http://www.zmag.org/CrisesCurEvts/Timor/timor_index.htm Not only will you find there the crucial background information and the all-important context that is usually missing or distorted in the corporate press, but there are important links to important activist groups as well.

THE BEST SHORT PIECE that I specifically recommend for a quick overview that will allow you to effectively educate your friends and relatives is: East Timor Questions And Answers, at http://www.zmag.org/ZNETTOPnoanimation.html

At this very moment, a very courageous U.S. reporter named Alan Nairn is being held by Indonesian forces in West Timor. Mr. Nairn was the last Western reporter in East Timor, a country on which he has reported for many years, and was recently arrested. Since he is perceived as a threat to the Indonesian operations in East Timor, his life is in grave danger. For a brief summary of his very urgent situation, go to: http://www.zmag.org/ZNETTOPnoanimation.html

Right now, what you can do is call your elected representatives in Washington, and tell them two things:

1. 1. Use your influence to get the United States to completely cut off all aid and support for the Indonesian government and military until they are entirely out of East Timor and U.N. peacekeeping forces are in control of a genuine transition to democracy, and
2. Use all your influence to obtain the release and safe passage out of the country for journalist Alan Nairn.

Here are the phone numbers of Minnesota's Senators in Washington:

• Senator Wellstone 202-3224-5641
• Senator Grams 202-224-3244

Phone numbers and other contact information for other Senators around the country can be found at: http://www.senate.gov/

Representatives' contact information can be found at: http://clerkweb.house.gov/mbrcmtee/mbrcmtee.htm

Tax Cut Consequence of the Week: Money For Jails, Not For Health and Welfare

From the Star Tribune (Newspaper of the Twin Cities!) of Wednesday September 15th: "[Hennepin] county projects 33 new positions for the jail and corrections, slightly offsetting reductions of 36 positions in Economic Assistance and at the Medical Center, where cost-cutting and workload efficiencies are expected to decrease staffing by about 125 full-time positions."

The article goes on to report that, when it comes to the aforementioned Economic Assistance (which includes family assistance, Food Stamps, and support for people with disabilities) and the Medical Center, the county actually "is expecting increased use of its services but a decrease in reimbursement levels, especially from state and federal programs."

Reporter Mark Brunswick failed to inform us as to what these cuts will actually mean in terms of reduced services.

Another key point in the article is that "The county benefitted this year from a one-time $3.9 million legislative bailout of the Hennepin County Medical Center for uncompensated care for noncounty residents, but county taxpayers are likely to pay those costs from now on." The phrase "uncompensated care" means the care that poor people get. If poor people from other places are coming in to use the health care facilities in Hennepin County, a couple of questions leap to mind. First, why are they doing this? Are there not services available in their own counties? Secondly, if Hennepin County is the provider of last resort for people from all over Minnesota, then why is the state not reimbursing the county for these services?

These are important questions for several reasons, not the least of which is that tax money from state taxes is derived largely from the relatively progressive income tax, while counties are forced to rely on the rather regressive property tax. So, not only is the dumping of health care costs onto Hennepin County unfair in the simple "Why are we paying for everybody else's health care?" way, but also is another manifestation of the reluctance of our political system to assess appropriate taxes based on ability to pay.

The somewhat odd headline to this article makes it seem as though it is primarily about tax rates, is "Hennepin County proposes tax increase of almost 3 percent." I say it is odd because the article itself was stimulated by the release of the proposed county budget for the upcoming year, only a part of which had to do with taxation. Nygaard Notes Alternative Headline: "County Cutting Health and Welfare Spending To Pay For Jails."

The chosen headline ceases to seem odd, however, when you consider that taxation levels are the most prominent feature of recent government news reporting, with the service cuts that are needed to pay for them being reported largely on a case-by-case basis. I believe that this tends to obscure what should be easily understood as a fairly straightforward cause-and-effect relationship. It would be hard to find a Minnesotan, in other words, who is not aware that there has recently been a large state tax rebate, or that the federal government is facing a huge (if largely mythical) projected tax surplus. I think it would be easy to find a Minnesotan who has failed to grasp the magnitude of the budget cuts needed to produce these surpluses.

Tax Cuts and Tax Rebates: What Are They Costing Us?

[What follows is an expanded version of an article that appears in the September 10th issue of ACCESS PRESS newspaper. For information on how to subscribe, E-mail them at access@wavetech.net.]

By the time you read this, the Nygaard Notes-ians who live in Minnesota will have received their sales tax rebate check from our State government. It is undoubtedly true that many readers will appreciate this "windfall" from the state. But Minnesota's decision to bestow the largest tax cuts in the nation upon its citizens goes hand-in-hand with a failure to adequately fund some of the programs and services that make Minnesota a good place to live.

What Our Governor Wants

In line with his philosophy of "limited" government, Minnesota Governor Jesse Ventura last winter proposed a series of cuts in state programs and services totaling $60 million. Although the legislature finally approved only slightly more than ten percent of the cuts the that Governor had proposed, it is revealing to look at some of the programs the Governor does not like.

The Governor proposed cuts of:

• $1,000,000 for the St. Paul Rehabilitation Center, which provides employment services to persons with disabilities or other barriers to employment by providing speech, rehabilitative and occupational therapy.
• $460,000 for Epilepsy Demonstration Grants, which provides training in independent living skills to adults with epilepsy.
• $30,000 for Outdoor Recreation Camping grants, which provide wilderness experiences and peer leadership skills to individuals with psychiatric disabilities.
• $600,000 for the Emergency Services Program, which provides funding for the operating costs of homeless shelters and for essential services to homeless families and individuals. This represents the entire state funding available for this program.
• $20 million in the budget for Family Preservation Aid, which is granted to counties to help them provide such things as crisis services, counseling services, life management skills services, case coordination services, mental health services, and early intervention services. [See "Tax Cut Consequence of the Week" above]
• $500,000 for the Microenterprise Technical Assistance program, which provides grants to nonprofit organizations to provide technical assistance to individuals with entrepreneurial plans, with a special emphasis on organizations that target nontraditional entrepreneurs such as women, members of a minority, low-income individuals, or persons seeking work who are currently on or recently removed from public assistance.
• $310,000 for Metropolitan Economic Development Association, which provides loans and technical assistance to new and expanding businesses in the metropolitan area that demonstrate potential to create jobs for low-income people.
• $530,000 for WomenVenture, which provides assistance to enable women to find jobs, plan careers, and start and grow businesses, with an emphasis on the need to serve low-income women who are becoming financially independent.

Funding cuts were also proposed for programs providing parenting skills, lead cleanup, dental health education, transitional housing for homeless people, bicycle safety training for kids, programs helping low-income women to become independent, and public radio and television.

Specific organizations targeted for funding cuts included Asian-American Juvenile Crime Prevention, the Indian Child Welfare Law Center, the St. Paul Urban League, the Minneapolis Urban League, the Anishinabe Council of Job Developers, Chicanos/Latinos Unidos En Servicio (CLUES), Casa de Esperanza, St. Paul Boys and Girls Club, Hmong American Partnership, Minneapolis Domestic Abuse Project, Phat Summer, and the Police Athletic League.

When Increases Are Really Cuts

When you read the press releases from the Governor's office or from the State Department of Finance, you will read about all of the funding increases for education, housing, nursing homes, and so on, but this can be deceptive.

The example of the Minnesota State Colleges and Universities (MnSCU) system makes the point clearly. The state Department of Finance will tell you that the MnSCU system received a $104 million funding increase from the state in the last legislative session. While this is true, it is also true that the system had figured that it needed more than $225 million to maintain the current level of services, and even our frugal Governor had thought that a $121 million increase was warranted.

Here's a Minnesota analogy to bring the point home: Let's say it's a particularly cold winter, so it takes 20% more natural gas than last year to keep the house at 68 degrees. Even if you increase your spending on gas, unless you increase it by at least 20% you are going to have one cold house. In the same way, an increase of $104 million dollars is really a cut for the MnSCU system. MnSCU Chancellor Morrie Anderson pointed out last May that the impact of semester conversion and rising faculty benefit costs, among other things, have taken their toll. He therefore expects cutbacks in the system, despite the "increase" in funding..

The situation at the Minnesota Department of Human Rights (DHR) provides another illustration. The DHR is responsible for enforcing non-discrimination in housing, employment, public accommodations and services, education, and numerous other things. In a recent conversation with a staff person at the DHR, I asked how the Department had done in terms of funding in the 1999 legislative session. She hesitated, then said, "Well, we stayed about the same." Upon further questioning, she told me that what she meant was that the Department "only had to lay off one-and-a-half people instead of nine."

The salaries of these one-and-a-half people will pay for approximately 200 sales tax rebates for people like me.

The Minnesota State Park system had wanted an increase of $7 million, and actually received only $850,000. One of the results is that 20 state park campgrounds have had to be closed indefinitely.

The budget for child-care subsidies for working families was increased by $20 million, to $122 million - but this will reduce the 7,000-family waiting list for child care by only 3,000, leaving 4,000 families still on the waiting list.

MinnesotaCare, the state's program to provide insurance to the working poor, failed to get sufficient funding, with the result that seniors, small businesses, farmers, and individuals likely will see increases in their premiums. David Olson, the president of the Minnesota Chamber of Commerce, points out that "it is ironic that many Minnesotans will experience increased health care taxes during this year of historic tax cuts."

The list goes on: 60,000 poor kids in Minnesota remain without health insurance, and the governor used his line-item veto power to cut funds for adolescent parenting, the environment, child development, and more.

A word about the sales tax rebates themselves: The decision was made to base the rebates not on total income, but only on taxable income (Line 4 on your Minnesota tax form). For this reason, many people whose income is derived from non-taxable sources such as Social Security, Social Security Disability, or Supplemental Security Income will receive no rebate at all. Many others who receive the majority of their income from these sources will receive only the minimum rebate of $212, even though they spent much more on sales tax than is reflected in the calculation based on only taxable income.

Overtaxed or Underfunded?

Every recipient of a sales tax rebate should consider whether the receipt of an extra $200 in cash is worth the loss or deterioration of public services that is required to come up with that cash. At a time when, in the words of former Minnesota Governor Arne Carlson, "Minnesota is blessed with a diverse economy that is 'pretty much No. 1 in the nation," it seems reasonable to ask why there is any beneficial public program that cannot have it's funding request fully met.

People on fixed or low incomes understand better than others the value of the things that public investments can give us. State parks, public universities, health care, and public transportation are just a few of the things that the state provides which an individual cannot purchase with the $200 or $300 provided by the recent tax rebates.

The Governor has been quoted as expressing his hope that when people look back on his administration they will say "When Jesse Ventura was around, I didn't even notice the government." Readers of Nygaard Notes may want to contact the Governor, and your legislators, to tell them that you do notice the government, and that you want Minnesota to be a leader by fully funding its vital public programs.