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Report: Minneapolis Pays Significantly More In Taxes Than It Receives In State Aid

MINNEAPOLIS (WCCO) -- A new report shows that businesses and residents in Minneapolis pay significantly more in taxes to the state than the city receives back in aid.

The report released Thursday from the Minneapolis Regional Chamber found that in 2017 the city paid out $1.97 billion in taxes while receiving just $543 million in state aid -- a ratio of 3.5 to 1.

"Minnesota has an interconnected economy, where all regions contribute to and support the success of one another," said Jonathan Weinhagen, the president and CEO of the Minneapolis Regional Chamber, in a statement. "However, the data in this report makes it clear that, from a revenue perspective, those contributions are not equivalent."

According to the report, which was compiled by the local research firm MacCallum Ross, Hennepin County and the seven county metro area also pay more in taxes than what they receive back in aid. Additionally, these lopsided contributions have been consistent every year since at least 2004.

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Over the last decade, Minnesota counties outside the metro have received more in state aid than what they pay in taxes. According to the report, in 2016, the 80 counties outside the metro collectively paid $6.38 billion in taxes while receiving $7.41 billion in state aid.

"The notion that the rest of the state is 'bailing out' Minneapolis is inaccurate," Weinhagen said. "To recover from the current economic downturn, Minneapolis needs a strong Minnesota and Minnesota needs a strong Minneapolis."

The COVID-19 pandemic and the resulting restrictions have devastated Minnesota's economy. In Minneapolis and across the Twin Cities, hundreds businesses have struggled over the last year, and many have closed for good.

The report stresses that it's important for the state to support small businesses in Minneapolis -- the heart of the state's economic engine -- in order for Minnesota to successfully recover from the pandemic.

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