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State taxes in Minnesota are high because taxes collected at the state level are used to hold down local property taxes.  It is misleading to cite the state tax ranking without also citing the local tax ranking.  Nationally, state taxes comprise only about one-third of total state and local government revenue (source: 2002 Census Bureau data).

In addition, state rankings based on government revenue per capita do not take into account higher labor costs in high wage states.  (For example, it is not possible to hire and retain qualified teachers in a high-income state like Minnesota for the same amount as in a low-income state like Mississippi.) 

Ranking states based upon revenues or expenditures as a percentage of personal income is a practical way to adjust for the higher labor costs in high-income states and thus enables a more useful comparison than simple per capita rankings.

If we look at all government revenue as a percentage of personal income, Minnesota ranks 24th among the fifty states (source: 2002 Census Bureau data).  Furthermore, the 24th ranking is based on FY 2002 data and does not take into account the large budget cuts enacted in recent years. 

All things considered, Minnesota is not a big government state.

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