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Gov. Pawlenty's Attack on Minnesota 2020 Report Falls Flat

June 02, 2010 By Jeff Van Wychen, Fellow and Director of Tax Policy & Analysis
Part Two in a Two-Part Series 

Lately, Governor Pawlenty has been going before the national media touting his credentials as a tax and spending cutter.  A recent Minnesota 2020 report, "On Our Way to Average: Ranking Minnesota's Economic Performance", along with subsequently released Census data (summarized in yesterday's article) supports the Governor's claims in this regard.  However, Pawlenty has been less eager to take responsibility for the deterioration in Minnesota's economic performance that has occurred during his watch.

Gov. Pawlenty attacked "On Our Way to Average" during an interview on Minnesota Public Radio and on his WCCO radio program.  Some of the Governor's comments were mere petulance directed at Minnesota 2020, while others were more substantive.  The following observations will focus on the latter category.

The Governor's primary critique was that Minnesota 2020 cherry-picked the performance indicators used in "On Our Way to Average" in order to make Minnesota "look bad."  Clearly, the Governor has chosen to attack the report without reading it.  Minnesota ranks among the top 10 states on four of the 13 indicators used in the report based on data for the most current year available and among the top 20 on nine of the 13.  However, even on those factors where Minnesota is still doing well, its performance relative to other states has generally deteriorated since 2002.

In general, the performance indicators examined in the report were broad based and widely accepted measures.  Furthermore, the statistical analysis of these indicators, especially the analysis on page 40, is more rigorous than most interstate comparisons. Pawlenty's assertion that the indicators were cherry-picked is nonsense.

The Governor went on to claim that Minnesota performs well relative to other states in ACT scores, National Assessment of Educational Progress (NAEP) scores, per capita personal income, the percentage of the population with high school and post-secondary degrees, and percentage of the population with health insurance.  Regarding these claims:

  • While Minnesota students do well on the ACT relative to other states, ACT scores are drawn from a self-selected sample; in approximately half of the 50 states, the ACT is not the primary college admissions test* and thus is not a particularly strong measure of academic attainment among the 50 states.  In fact, ACT Inc. advises that ACT scores not be used as a basis for interstate comparisons.  For these reasons, ACT scores were not among the factors examined in "On Our Way to Average."
  • While Minnesota's NAEP performance is strong, it is not as strong as it was in 2002 at the dawn of the "no new tax" era.  As demonstrated in "On Our Way to Average," Minnesota's rank in terms of the average percentage of students performing at or above basic in NAEP's 4th and 8th grade math and reading has fallen from 3rd in 2002 to 8th in 2007.
  • Minnesota's 2009 per capita personal income rank is 13th highest among the 50 states.  However, in 2002 Minnesota's rank was 8th highest.  From 2002 to 2009, Minnesota per capita personal income has declined relative to the national average.
  • Relative to other states, Minnesota does indeed do well in terms of the percentage of the state's population with high school and post-secondary degrees.  However, from 2002 to 2008 (the most current year for which data are available), Minnesota's rank and position relative to the national average has slipped, albeit slightly.
  • As noted in "On Our Way to Average," Minnesota does indeed do well in terms of the percentage of the state's population covered by health insurance.  While Minnesota's rank on this indicator slipped slightly from 2002 to 2008, our position relative to the national average improved slightly.?  So much for the accusation that the report only examined factors that made Minnesota "look bad."

Like a skilled political spinmeister, Pawlenty focuses exclusively on data from a single year in order to obscure the fact that nearly all trends for Minnesota are going in the wrong direction.  The updated information in yesterday's article demonstrates that in terms of the change since 2002, Minnesota ranks among the bottom half of all states on 12 of 13 performance measures; Minnesota's highest ranking in terms of the change since 2002 is 23rd.  Pawlenty's peevish comments and misplaced indignation cannot conceal the fact that Minnesota has slid downhill during his tenure.

The Governor also argued that in recent years Minnesota has done better (or less badly) than other Great Lakes states, which is generally true.  However, at least three of these states (Michigan, Indiana and Ohio) are heavily dependent on the auto industry, which crashed during the period under examination.  The auto industry is a small share of the economy in Minnesota, so Minnesota certainly should be doing better than these states.  Wisconsin also has done very poorly since 2002; like Minnesota, Wisconsin has made large cuts in public revenue and spending.  In fact, Minnesota is #1 in cutting own-source revenue since 2002, while Wisconsin is #2.

The Governor further cited California as a big-spending, liberal state which has done poorly in recent years.  To the contrary, California is an example of a state that has a dysfunctional fiscal and political system that is by no means exclusively the fault of "liberals."  In addition, California has restricted its revenue raising ability through ill-conceived initiatives (e.g., Proposition 13) to the point where public investment in infrastructure and education has declined sharply in recent decades.  In fact, the deterioration of public investment in California is what State Economist Tom Stinson and State Demographer Tom Gillaspy have referred to as the "California spiral."  Stinson and Gillaspy suggest that declining investment in California has led to declining personal income relative to the national average.

Based on the Governor's critique, the states that Minnesota is outperforming in recent years are those that have been racked by the collapsing auto industry or that, like Minnesota, have made sharp cuts in public investment.  In his attempt to somehow spin Minnesota's waning economic performance as a success story, the Governor is setting the bar rather low.  Upon close scrutiny, the states that Pawlenty cites in an attempt to defend Minnesota's disappointing performance actually undermine the case he's trying to make.

Gov. Pawlenty and other proponents of the "no new tax" agenda have made the case that cutting taxes and reducing public investment would strengthen Minnesota's economic performance relative to other states.  Unfortunately, it hasn't worked out that way.  If anything, the trends have been in the opposite direction.  Furthermore, Pawlenty's attacks on "On Our Way to Average" fall flat and do nothing to undermine the report's conclusion:

Minnesota's continued strong economic performance relative to the rest of the nation is by no means predestined; Minnesota's position in comparison to other states can and has deteriorated. This deterioration has corresponded with shrinkage in Minnesota's public investment.  Minnesota's ability to restore a bright economic future lies not in a slavish devotion to shrinking public revenue, but upon our ability to identify the state's long-term investment needs and fund them appropriately.

*According to 2006 data from the Georgia School Council Institute, the SAT is more prevalent than the ACT in 25 of the 50 states.  In 25 states, fewer than half of all college applicants take the ACT.

?This data does not reflect the impact of cuts to the General Assistance Medical Care program that were implemented after 2008.  These cuts will likely contribute to a decline in the percentage of the Minnesota population with health insurance coverage.

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