Minneapolis is the major economic driver in this state, and it's not a matter of opinion. The size is outlined below, although I have not been able to find exactly corresponding numbers for all categories, i.e. some are from 2001, some from 2003 and some from the state Fiscal Year 2003, which ends June 30 of this calendar year.
With just 7.8% of the state's population, Minneapolis contributes roughly 10% of the state government's tax revenue. 71 to 82%[3] of state revenue comes from income taxes (43-50.7%) and sales tax (28-31.2%). For those 2 primary categories, Minneapolis residents paid $342 million in sales tax in 2001[1]. For the 2003 fiscal year, Minneapolis residents will pay more than $402 million in income taxes[2]. Of the remaining 29%, corporate tax and motor vehicle sales are the next largest. Minneapolis corporations paid $101 million in income taxes generated in Minneapolis in 2001[1]. I was unable to obtain numbers for the amount of other taxes paid by Minneapolis residents, such as motor vehicle sales, motor vehicle fuel taxes, liquor/tobacco taxes, statewide property, etc. which are the remaining "large" revenue sources (i.e. 2% or greater).
The state fiscal year 2003 total state tax revenue is coming in at about $12 billion. [Total budget is much larger, but the remaining revenue sources are federal aid and non-tax revenue.]
Despite mixing 2001 (smaller than 2003 will be) and 2003 figures, it's clear that Minneapolis is contributing an easily identified $850 million in direct tax revenue to the state. Estimating that Minneapolis contributes about 7% of the remaining taxes just to get a ballpark number brings the figure well over the billion dollar mark.
Those are just direct taxes collected inside the Minneapolis city limits. Minneapolis' share of the state work force that goes to work each day in Minneapolis is 12%[1]. The amount of other commerce involving Minneapolis is clearly of major significance.
Now imagine turning Minneapolis into a has-been urban derelict like some other industrial inner city "has-beens" in earlier decades. Think that would be good for the state? Clearly it would be disasterous.
I think a far better case can be made than I've made here by those with better access to demographic and financial figures.
A good case could even be made to that Minneapolis deserves a larger share of the LGA money simply because even without any cuts to the LGA total, Minneapolis is a net contributor to the state, not a net receiver. Contrary to the apparently prevailing view among the "wealthy" suburbs, they are actually net receivers, when one looks at things like the cost of building infrastructure for those cities (see I-94 interchanges in Maple Grove for a good example).
Chris Johnson
Fulton (officially, but really more like the Bermuda Triangle for all the good it does those few of us down here in the Harriet Heights addition)
[1] Minneapolis StarTribune, 2/24/03
[2] Estimate based on MN State Finance Department estimates
[3] Revenue source ranges from several MN State Finance and Revenue Department web pages which supply slightly differing numbers.
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