History

The Early Years

In the year of MTA's birth, 1926, Minnesota and the rest of the country were in the middle of strong recovery from the first World War and were continuing on the path toward a "return to normalcy" in both foreign relations and fiscal matters. Minnesota had a governor with the nickname of "Tightwad Ted", Governor Theodore Christianson, a resolute budget cutter with a new Department of Administration and Finance and the line item veto to assist him in his drive to economize state government. Farmers, whose activities accounted for about 35% of the state's economy, were not uniformly sharing in the prosperity of the twenties. Thousands were being forced to leave their farms for defaulting on property taxes and mortgage payments as prices for their products lagged behind the cost of producing them.

A government research movement had been working to professionalize primarily local governments for 19 years, and the Governmental Research Association (GRA), the official body of that movement, had been accepting members since 1914. There were already 15 local taxpayers groups in the state, including the Taxpayers League of St. Louis County (1921) and the Minneapolis Taxpayers Association (1924), both members of the GRA. St. Paul had been benefiting for 5 years from the work of the St. Paul Bureau of Municipal Research, another early GRA member.

In this environment, the first steps toward launching the Minnesota Taxpayers Association were taken at a luncheon meeting in Minneapolis on February 25, 1926. It was planned that the Association's core would be representatives of those 15 local taxpayers groups. Considering the mood of the day, it was no surprise that the number one objective of the new nonpartisan association was to lower taxes. Three other objectives to come out of this meeting were: to eliminate extravagance, reduce public debt, and stop misuse of public funds.

The list of officers was an impressive cross section of prominent Minnesotans:

Name Office Occupation City
T. D. O'Brien Temporary President former Minnesota Supreme Court Justice St. Paul
J.F. Reed 1st vice president President of the MN Farm Bureau Federation St. Paul
H. Z. Mitchell 2nd Vice President former President of the MN Editorial Association Bemidji
Whitney Wall 3rd Vice President Realtor Duluth
C. D. Tearse 4th Vice President   Winona
E. A. Purdy Secretary Vice President of the Wells-Dickey Company Minneapolis
C. M. Palmer Treasurer   Mankato

The methods they would employ to carry out their objectives were stated as:

On November 22, 1926, the Association took steps to become a permanent organization at a meeting at the Nicollet Hotel in Minneapolis. J. F. Reed was elected the permanent president. They wanted to go statewide and "place immediately a secretary in the field" to organize a local taxpayers unit in every county of the state.

That work began after the first of the year. In short order, by the first of March, the South Central, Southeast, and Southwest Taxpayers Associations were formed in meetings at Mankato, Rochester, and Worthington respectively by representatives of 28 counties and the state association's officers. Six additional organizational meetings were planned for 1927. They were so successful that by April there were 45 county taxpayer groups across the state. This number had increased to 67 by 1931.

In that year the Great Depression was in full swing and the pressure to keep local property tax levies under control was even stronger than at MTA's founding. By working through the local taxpayer groups, MTA was able to produce nearly $23 million in levy reductions in the two-year period of 1931-32. This was just under 10% of the approximately $240 million local levies statewide for those two years.

By World War II, the MTA had grown to an association of 81 county taxpayer groups. The emphasis during all the preceding years had continued to be on assisting local taxpayers groups to continue their efforts to economize without jeopardizing service at the local government level. In the early 1940s, with the growing prominence of state and federal fiscal policies, the MTA began to shift its focus away from the local level. A taxpayers manual for local groups from those years gives MTA's view of itself in that period: "The State Association represents you at State Legislative sessions; prepares the research background; conducts tax meetings; prepares material for newspapers; broadcasts over the radio."

Merger and Incorporation

In August of 1956, MTA merged with another nonpartisan government research organization, the Minnesota Institute of Governmental Research (MIGR). The formation of the MIGR was formally announced on December 18, 1934. The institute had a focus similar to MTA, namely "that wastes, duplications, inefficient methods, and un-businesslike practices can be discovered and eliminated, since they strike at the very foundation of representative governments". It, too, was supported and controlled by citizens, but its methods were less like the grassroots organizing of MTA and more oriented toward an academic outlook. The academic bent was exemplified by its advisory board, comprised of three university professors.

MIGR named a group of Minnesotans familiar with public affairs among its first officers and directors:

First Officers and Directors of MIGR
Name Position Affiliation
C. Leslie Ames Chairman Chairman of the St. Paul Institute
W. W. Skinner Treasurer President of the St. Paul Association
George W. Lawson   Secretary of the MN Federation of Labor
Carl P. Herbert   Director of the St. Paul Bureau of Municipal Research
Daniel A. Wallace   Editor of "The Farmer"
Herbert J. Miller   President of the Mpls. Civic and Commerce Association
Hugh H. Barber   Minneapolis attorney

Carl Herbert was present at the November 1926 meeting establishing MTA permanently, as was Herbert Miller, who was also a former president of the Minneapolis Taxpayers Association. The three University of Minnesota advisors were Dean Richard E. Scammon of the School of Medicine; William Anderson, professor of political science; and Professor Roy G. Blakey, tax expert at the university. Harold L. Henderson, with a deep background in governmental research from Wisconsin and Illinois, was the executive director for the entire 21-year duration of MIGR. Walter Heller, famed University of Minnesota economist and presidential economic adviser, had joined the board by 1949, and served until the 1956 merger with MTA. (C. Leslie Ames served as chairman or president until the early 1950s, when Francis Butler replaced him until the merger.)

The institute had its first research bulletin prepared for the announcement of its formation. The staff dived right into the midst of the controversial issues of the day with the publication of "Feasibility of Blanket Tax Limitation Laws as a Means of Reducing the Tax Burden on General Property in Minnesota, Arguments for and Against". It followed this December 1934 publication with 5 more in 1935 on such topics as the merits of a sales tax, also called a "gross income tax" (more than 30 years before the state's first sales tax in 1967), descriptions of and problems with the property tax, and an analysis of the new Social Security Act and its implications for Minnesota.

Because government did little research in those days, MIGR had a tremendous impact on Minnesota state government. The MIGR staff actually performed the work leading up to the 1939 Reorganization Act under Governor Harold Stassen. This act received national attention as it produced major improvements in the administration of state government, saving millions of dollars in the first 10 years after enactment. It was through the Reorganization Act and the work of MIGR that the Departments of Taxation and Administration were created and the spoils system was replaced with civil service. As a follow up to the Reorganization Act, MIGR staff was loaned to the "Little Hoover" commission of the early 1950s to study areas for further reform in state government.

In August of 1956, MIGR and MTA announced their merger. MIGR was absorbed into MTA as the Research Division, with the same staff and dedication to studying and promoting economy and efficiency in government. In announcing the merger, Francis Butler, the president of MIGR, stated that the original objective of the institute had been accomplished. Its last research bulletin, Number 38, "Report on the Conclusions of the Minnesota and White House Conferences on Education with comments on Application to Minnesota", was released in May 1956. Bulletin 39, "Minnesota's Public Educational System", was released in October 1956 under the MTA logo.

Within two years of the merger, in August of 1958, MTA filed papers of incorporation with the Secretary of State. The original MTA organizational plan of delegates elected at the county level to be sent to the state association's annual meeting was replaced with a board of directors and a statewide membership of individuals and companies.

The combined groups, now incorporated, focused on monitoring state fiscal matters and advocating for sound fiscal policy. MTA was instrumental in educating taxpayers regarding the sales tax with two releases of "A Factual Handbook on the Sales Tax" (1958 and 1960) and "A Replacement Sales Tax for Minnesota" (1963). Just after merging but before incorporating, MTA began publishing "Fiscal Facts for Minnesotans", starting in December of 1957 and continuing to our 1993 version. Each biennial legislative session was monitored, documented, and evaluated with an expanded publication called "Fiscal Review", until its publication was taken over by the newly created Senate Research Office in 1975, which continues to publish it annually. A widely read and discussed publication series was begun in 1969 with the first release of "How Does Minnesota Compare?" that continues to the present time. Two additional comparison studies were done on the individual income tax in 1977 and 1984 which put serious pressure on the state legislature to acknowledge that competitiveness with other states was an important issue. The attention paid Minnesota's rankings in these comparisons ultimately resulted in the reform of Minnesota's income tax with an additional goal of trying to get us out of the top ten states in income tax collections per capita. The income tax comparison study is now published every other year by the Minnesota Department of Revenue.

The Difficult Years

Three distinct trends starting in the 1960s and continuing through the 1980s have forced most taxpayer groups to reevaluate their role and have made it more difficult for them to find financial support. This has been particularly true of those groups specializing in educating the general public through research.

First, dramatic growth in state aids to local governments resulted in a shift of policy making and control away from local governments towards the states. Quite naturally, many organizations directed their attention more to state and federal governments, but the increased complexity and distancing from local concerns resulted in a consequent loss of immediacy and relevance to the taxpayer. Second, that growth of state government spurred the hiring of professional state analysts and the creation of several nonpartisan research offices within government itself. Besides preparing research publications actually introduced by governmental research associations, these state units have produced many other fiscal research publications, spawning public policy programs and still more research at colleges, universities, and by consultants under contract. Finally, a surge in the number of member-supported special interest groups, each with their own set of narrowly defined objectives, has made it more difficult for the traditional government research groups to find the financial support needed to conduct costly nonpartisan research with a broader perspective and sometimes less of a perceived immediate "payback".

However, this is not the end of the story. The fiscal realities of the 1990s and beyond combined with yet another realignment in the federal/state/local relationship suggest that a resurgence of these groups is likely, provided they're prepared to meet the challenge.

Resurgence and a Glance Ahead

With the federal dominance of state and local government at an all time high in the late 1970s, it was difficult to imagine that The New Federalism of the 1980s was on the verge of reversing a 50-year trend. The deliberate Reagan-era policy of pushing responsibilities back down to the state and local levels, along with massive federal deficits that continue to hamstring the federal government to this day, combined to bring the "action" close to home again. Furthermore, faith in government's ability to solve all problems has rapidly diminished at the same time that the conviction that taxpayers need to study and watch government has grown. Taxpayers are waking up after a nearly 30-year nap.

Our recent efforts at educating taxpayers about state and local financing through the publication of our award winning Understanding Your Property Taxes and the only-one-of-its-kind State Government Spending, plus countless public presentations, are evidences of our commitment to raise taxpayers' awareness of and involvement in state and local fiscal policies. The public acclaim we have received shows that the MTA is uniquely positioned to play a prominent and vital role in the improvement of state and local government in the years ahead. With nearly 70 years of experience and a reputation for fairness and accuracy, we are making a difference, and can continue to do so. Just at the time the state and local governments are taking the forefront and the taxpayers are looking for greater value for their tax dollars, there is more need than ever for a group like the Minnesota Taxpayers Association. MTA is ready and willing to jump into the fray.

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An Independent Voice for Good Government and Sound Tax Policy...Since 1926.