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2013-14 Minnesota Legislative Session Might Be Best for Economic Equity in 40 Years

WRITTEN BY DANE SMITH AND MAUREEN RAMIREZ, GROWTH & JUSTICE

The 88th Minnesota Legislature (2013-2014 sessions)may be viewed in coming years as a historic moment for policies and investments that improve the condition of Minnesotans living in poverty and for other vulnerable households. In fact, we think a case can be made that the 88th Legislature provided the most economic benefit since the so-called “miracle” years of the 1970s for those households that rank in the bottom 20 percent in income (or roughly $25,000 per year).

Many organizations, including Growth & Justice, worked tirelessly to educate and inform legislators about Minnesota’s income inequality, racial disparities, and the strategies to reverse them. In between the 2013 and 2014 sessions, House Speaker Paul Thissen invited Growth & Justice Policy Fellows Jay Coggins and Thomas Legg, professors at the University of Minnesota, to present our “Widening Inequality in Minnesota” report to the joint House-Senate Legislative Commission on Planning and Fiscal Policy. That study documented a sharp rise in the share of Minnesota wealth and income enjoyed by those at the top, an actual decline in median income for the middle incomes and, and a rising poverty rate left by the Great Recession of 2008-09. We also shared with legislators the recommendations from our “Workforce Equity for a Competitive Economy,” project, which outlines the “Inseparable Imperatives” of racial equity, improved workforce training, and job growth.

That context, supported with evidence from many other sources about our emerging inequality crisis and its threat to our Minnesota economy, helped set the stage. When it was over, the 2013-14 biennium was celebrated by dozens of non-profit, religious and philanthropic organizations for breakthrough investments in those who have benefited least from overall economic growth in recent decades.

Here’s a partial list of accomplishments, and a quick assessment of their approximate impact:

  • The largest minimum wage increase in our state’s recent history, to $9.50 an hour, translates to a whopping raise of about $472 million annually for some 325,000 working Minnesotans, most of whom are living in low-income households.
  • MnSure, Minnesota’s effort to comply with the federal Affordable Care Act, has now signed up an additional 230,000 individuals for coverage.   By 2016 the percentage of uninsured or under-insured Minnesotans is projected to decline by two-thirds.
  • Minnesota’s Dream Act, which reduces costs and removes barriers to higher education for undocumented Minnesota youth, is expected to benefit as many as 600 students, mostly low-income immigrants, and likely will benefit many more in coming years.
  • Early childhood education funding targeted to low-income parents took a giant leap forward in the 2013 session and put Minnesota on the map among the national leaders in this crucial investment for economic growth. A new MinneMinds coalition, strongly supported by business leaders, won additional funding in 2014 and is poised to push for full funding for all low-income children in coming years.
  • Low-income households are much more likely to be headed by women, especially women of color, and studies show a substantial gap in their compensation relative to men.   Hundreds of thousands of Minnesota women stand to benefit from a raft of provisions under the Women’s Economic Security Act. The new laws expand access to childcare and family and sick leave, protect women from discrimination, reduce the pay gap between men and women, and set up a pilot project that helps women entrepreneurs gain entry into male-dominated industries.
  • In a historic shift from simply funding K-12 education to ensuring cradle-to-career results and workforce readiness, the 2013 education funding bill was labeled the World’s Best Workforce bill. School districts now have to engage their communities and come up with specific plans to close achievement and attainment gaps by income and race.
  • Affordable housing investment got a big boost with some $100 million in the 2014 bonding bill for construction and preservation of the statewide housing stock serving low-income households. The amount has been described as the largest in state history for affordable housing, and bipartisan agreement on this priority has been particularly encouraging.
  • Some of the basic subsistence benefits for our poorest families with children will be increased for the first time in many years, adding to an impressive list of legislative and administrative improvements in human service deliveryover the last two years.
  • Finally, restoration of higher income tax rates on top incomes, combined with property tax relief, retention and improvements to the renters’ credit and other tax changes have finally reversed the trend toward regressivity in Minnesota’s tax structure. Low-income taxpayers still pay a larger percentage of their income in state-local taxes than those at the top, however.

Whether these advances turn out to be a historic blip or the beginning of a sustained course toward more equitable public policy in Minnesota remains to be seen. We hope and will strive for the latter because decades of widening inequality will take years to undo. But either way, the 88th Legislature made a big difference for the lives of low-income Minnesotans.

Dane Smith is the president and Maureen Ramirez is the policy and research director for Growth & Justice, a policy research and advocacy organization that aims to broaden prosperity and reduce economic and racial disparities in Minnesota.  Smith is a former journalist with 30 years of experience covering government and politics for the Star Tribune and the St. Paul Pioneer Press.   Ramirez was formerly a member of the Board of Regents for the University of Minnesota.


Read the original post at The Jay & Rose Phillips Family Foundation Blog.

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