Minnesota Sales Tax Increase, Amendment 1 (2008)
The Minnesota Sales Tax Increase Amendment, also known as Amendment 1, was on the November 4, 2008 ballot in Minnesota as a legislatively-referred constitutional amendment, where it was approved. The measure enacted an increase of three-eighths of one percent in the sales and use tax in order to provide revenue to protect the natural resources of the state and to preserve Minnesota's arts and cultural heritage. The increase began on July 1, 2009 and continue until the year 2034.
|Minnesota Amendment 1 (2008)|
Election results via: Minnesota Legislative Reference Library
Text of measure
The text of the measure as it appeared on the ballot read as follows:
|“||Shall the Minnesota Constitution be amended to dedicate funding to protect our drinking water sources; to protect, enhance, and restore our wetlands, prairies, forests, and fish, game, and wildlife habitat; to preserve our arts and cultural heritage; to support our parks and trails; and to protect, enhance, and restore our lakes, rivers, streams, and groundwater by increasing the sales and use tax rate beginning July 1, 2009, by three-eighths of one percent on taxable sales until the year 2034?||”|
The full text of the measure can be read here.
It increased the sales tax throughout the state by three-eights of one percent. That tax increase will amount to about $300 million a year of new revenue for the state government. The measure was a legislative referral placed on the ballot by the Minnesota State Legislature. The state Department of Revenue estimates that the amendment will cost an average Minnesota household $60 a year.
Money raised through the new tax is be dedicated to pay for natural resource protection and cultural heritage programs.
The tax dollars raised through the sales tax increase (estimated to be $11 billion over 25 years) is distributed according to the following formula:
- 33 percent to restore, protect, and enhance wetlands, prairies, forests, and habitat for fish, game, and wildlife;
- 33 percent to protect, enhance, and restore water quality in lakes, rivers, and streams and to protect groundwater from degradation (at least five percent of the this amount must be spent only to protect drinking water sources);
- 14.25 percent to support the state’s parks and trails; and
- 19.75 percent for the arts and cultural heritage purposes.
"Vote Yes Minnesota" was the official group that formed to support the amendment. Ken Martin is the campaign director of the group. In late June, Martin predicted that his group will raise funds needed to pay for "a full-blown multi-million-dollar advertising campaign," and would likely raise and spend $5,000,000.
Other supporters included Ducks Unlimited, the Guthrie Theater, radio personality Eleanor Mondale, Vikings legend Bud Grant, and the Minnesota Environmental Partnership, a coalition of 80 nonprofit environmental and conservation organizations.
Arguments in favor
Notable arguments made in support of the measure included:
- The arts in Minnesota are in desperate need of funding and are otherwise left on the sidelines financially because of other pressures on the state's budget.
- The amendment will protect drinking water and provide funding for the clean up of rivers, lakes and streams.
- It will create a chance to preserve open spaces before they are lost to development.
- Investing in this type of spending will make it easier for businesses to attract top employees.
- It is a way to meet critical needs after years of underfunding.
Donors in favor
Donors to pass the amendment included:
- Alida Messinger, $1,000,000.
- C. Angus Wurtele, an honorary trustee at the Walker Art Center in Minneapolis, $40,000.
Opponents of the measure included:
- Taxpayers League of Minnesota
- Minnesota Chamber of Commerce
- Minnesota Farm Bureau
- National Taxpayers Union
- Former U.S. senator Dave Durenberger..
- The Pioneer Press
"That case was weakened when the Legislature added arts and cultural heritage funding to the mix. This was a case of piling the load too high, what the legislators call "loving it to death. Arts programs can certainly make a case for state funding, but they are not irreplaceable in the sense that our lakes and wetlands are. Plus, a theater or a museum has the added burden of proving its worth in the marketplace."
- The Star Tribune
"The amendment increases the likelihood that other worthy causes will line up to try to circumvent the legislative process and appeal directly for funding. This could result in the kind of government gridlock experienced in states such as California. And it would give elected officials less flexibility to address budgetary challenges in areas such as education and public safety."
- “How will the funds be spent specifically? Who makes those decisions? What are the anticipated results? And most importantly, how do voters hold the people who have made those decisions accountable? Remember, by 2035 Minnesotans will have kicked in $11 billion, all of it able to be spent by people they do not elect.” (St. Cloud Times)
- “Fairly or not, Minnesota is perceived as a high-tax state. An additional sales tax to fund recreation and entertainment seems a tad irresponsible.” (Forum Communications)
- “A vote for the Legacy Act would cost the average Minnesota family $56 each year. No, that's not a bank-buster, but any tax increase is a tough sell in our current economy.” (Rochester Post-Bulletin)
- "With our economy in shambles, now is not the time to increase the sales tax which statistically affects low-income Minnesotans more than wealthy Minnesotans." (Bemidji Pioneer)
Radio talk show host Joe Soucheray published an opinion piece against the sales tax hike entitled, "Outdoors tax is legislators' scam." Said Soucheray, "It's bad public policy. It is an admission of failure by the Legislature to budget and prioritize. Lawmakers spend too much money while we are circling our financial wagons just to stay even."
The Taxpayers League of Minnesota released two radio ads against the sales tax hike: Radio Ad 1: Vote "no" because your budget is crunched enough. Radio Ad 2: Vote "no" because you don't want to give millions of dollars to the arts.
Notable arguments made in opposition to the measure included:
- The sales tax increase, if passed, will cost every Minnesotan almost $60 more each year in taxes. Average income families in Minnesota are having trouble making ends meet, and can't afford an increased tax burden.
- Tax increases aren't needed. "The Legislature just increased taxes by $700 million to $800 million with gas tax, license tabs and increased business taxes. Now you're going to add another $300 million on top of that?"
- Opponents say that dedicated funding is bad policy. Farm Bureau President Kevin Paap, specifically, says, "We oppose constitutionally dedicating the statewide sales tax for any specific purpose."
- Support for the measure "is being driven by the state's 'liberal elite' to provide a 25-year taxpayer subsidy for the arts institutions they have long championed."
- Plenty of public arts funding already exists. In fiscal year 2008, the Minnesota State Arts Board gave away $5,146,926 in institutional support, $109,750 to American masterpieces, $626,573 to institutional presenter support, $57,000 to series presenters, $59,000 to artist initiative, $95,000 to cultural community partnerships,$7,262 to K-12 arts challenge Minnesota, $115,000 to organizational support, and $113,128 to school support.
- The money could be used to lobby for more taxpayer dollars. The Minnesota Office of the State Auditor released a report that found local governments (mostly cities, counties and school districts) spent $7,817,620 of taxpayer dollars lobbying the state Legislature in 2007. Recipients of the sales tax hike funds could use that money to lobby for even more money.
- Tax policy should be done by the Legislature.
- Minnesota's business climate is already ranked 41 out of 50 states. Raising taxes will only make that worse.
- Some locals have suggested that increasing their tax burden to fund the arts is unacceptable when tax dollars currently fund projects such as the Franconia Sculpture Park, which includes works such as what locals call "The Big Poo."
Arguments from NoSalesTaxIncrease.org
1. It’s $11 billion out of Minnesotan’s pockets. The almost half percent sales tax increase will generate $11 billion over 25 years, paid for by you, the taxpayer, and given into the hands of government.
2. It’s a Constitutional Amendment. If passed, the question on the ballot will be an amendment to the state Constitution, which will never go away. The Constitution is a document formed for the purposes of giving rights to the people and limiting the rights of government. A mandated tax increase and a mandated way to spend that money is an abuse of the state Constitution.
3. It mandates where $300 million each year will be spent. If passed, $300 million each year will be dedicated solely for the purposes of the arts and outdoors. Although these things are important, the role of the state legislature is to decide where taxpayer dollars are spent each 2-year budget cycle. We elect representatives to the legislature to prioritize spending. This amendment would allow $300 million of taxpayer money to bypass the legislative process and force them to spend it on the arts and outdoors, even if that year there were higher-priority needs for other things, like roads and education.
4. There’s no lack of current funds. Although few know it, millions of taxpayer dollars already go to fund environmental projects. The Department of Natural Resources has a 2-year budget of $1.5 billion. A portion of the state lottery proceeds goes to the Environmental and Natural Resources Trust Fund. The market value of this fund is currently at $415 million. Clearly, there is no lack of funding for environmental projects.
5. We can’t follow the money. If this tax increase passes, hundreds of non-profit organizations will lobby to get their hands on these government grants. As opposed to government departments, non-profits do not have to report where and how they spend their money. Once these non-profits receive government grants from the dedicated funding, taxpayers will never see where their money is spent.
6. It creates a scary precedent. This will be a precedent-setting amendment if it passes. Once our Constitution begins to dedicate money to specific spending projects, there will be no end in sight of coalitions and special interests enticed to seek constitutionally dedicated funding for their own pet projects. Just in September, Speaker Anderson-Kelliher (D-Minneapolis) mentioned she can now start planning a constitutionally dedicated gas tax. If this $11 billion ballot question passes, we can guarantee we’ll see many more and many higher tax increases on future ballots.
7. The first version of the bill was better. The tax increase on the ballot didn’t start out as a tax increase at all. Initially the idea was a bill to dedicate a portion of the existing sales tax to environmental conservation programs only. But that plan proved unpopular with liberal legislators who didn’t want to divert current sales tax revenue to rural environmental programs. So instead they are asking voters to increase the state’s sales tax by an additional almost half a percent and direct billions of those dollars to arts and cultural heritage.
8. Look who’s supporting this tax increase. Just looking at the 200+ groups supporting this tax increase shows that this is nothing more than a slush fund for special interest groups. Over half of the groups are arts and theater organizations. The only reason they are supporting this and are willing to give large donations to the vote yes campaign is because they know they will receive free taxpayer dollars if it passes. Don’t let them tell you this is for Minnesota’s outdoor heritage alone; billions of dollars will go to art and theater organizations.
9. The government is not a charity. We’re all supporters of the outdoors and we all love beautiful Minnesota. But that doesn’t mean the government should mandate a tax on Minnesotans so that non-profit organizations can get funding. Thousands of non-profits exist strictly off of charitable donations from people who support their causes. There’s no reason that these organizations should be any different. For infrastructure and environmental projects that benefit all of Minnesota, there’s plenty of money available through the DNR and the lottery.
10. We already pay enough taxes. Minnesota is home to one of the highest sales tax rates (6.5%) in the country, plus we have a high income tax rate too. If the ballot question passes, the sales tax will increase to 6.875%. Next add county and city sales taxes already implemented, and in Hennepin County alone, we’re looking at almost an 8% sales tax.
- Minnesota 2008 ballot measures
- 2008 ballot measures
- List of Minnesota ballot measures
- History of direct democracy in Minnesota
- Outdoors, arts amendment heads to ballot, Minnesota Public Radio, February 14, 2008
- 2009-2010 Minnesota Legislative Manual (Blue Book)
- Minnesota Legislative Reference Library
- 2008 Laws of Minnesota
- Minnesota Legislative Reference Library, "State Constitutional Amendments Considered," accessed July 15, 2014
- 'Minnesota Legislative Reference Library, "Chapter 151," accessed July 15, 2014
- Details of program expenditures
- Details from the state legislative data service
- Pioneer Press, "Bitter fight over outdoors tax climaxes Nov. 4," September 25, 2008
- ECM Capitol Reporter, "Clean water, land and legacy constitutional amendment has support, opposition," September 26, 2008
- Taxpayers League of Minnesota
- Minneapolis Star-Tribune, "Coalition releases radio ad to defeat tax amendment," September 25, 2008
- Battle over amendment is heating up
- KAAL-TV, "The "Vote Yes" Committee," September 25, 2008
- Minneapolis Star Tribune, "Tax amendment taking back seat on ballot," September 27, 2008
- Osakis Review, "Minnesotans don't need tax," October 21, 2008
State of Minnesota
St. Paul (capital)
Minnesota State Constitution | House of Representatives | Senate | County Attorney | House Research Department | Legislative Reference Library | Senate Counsel Research and Fiscal Analysis | Legislative Auditor |
|State executive officers||
Governor | Lieutenant Governor | Attorney General | Secretary of State | Commissioner of Management and Budget | State Auditor | Commissioner of Education | Commissioner of Insurance | Commissioner of Agriculture | Commissioner of Natural Resources | Commissioner of Labor and Industry | Chair of Public Utilities |