My Minnesota Budget

Steve Peterson, Senior Analyst for the Coalition of Greater Minnesota Cities, recently developed and released a web-based tool called My Minnesota Budget. His letter about the web site recently appeared in numerous state newspapers including the Grand Forks Herald. The innovative tool allows the end user to play the next Governor.  By clicking on the site, one will find a vast array of revenue and expenditure choices that place into context the signifcance of the state’s projected $5.8 billion deficit.  One will quickly find that balancing the budget takes more than a couple of targeted taxes or spending cuts.  Peterson (who I have met on many occasions and is absolutely brilliant, by the way) perfectly summarizes the dilemma facing Legislators and the next Governor.

“…a $5.8 billion budget deficit is equal to 15 percent of the state’s General Fund spending. If the state halted all general fund dollars going to public safety, state government, environment, energy, natural resources, economic development, agriculture, veterans, and transportation, Minnesota still would have a $2.3 billion budget deficit.”

Wow.  If we eliminated the entire state “bureacracy,” and did not do a single thing with roads, and eliminated essentially everything except for education and health care (including the Governor and the Legislature!), the deficit would be cut by barely more than half.  This problem extends far beyond simply trying to be “more efficient,” or “creative.” And, it will take much more than growing our way out of the problem. 

It is no wonder, as Peterson notes, that none of the three major Gubernatorial candidates have put forth a comprehensive budget-balancing plan.  One candidate practically denies that the deficit really exists.  Another would (arguably) make Minnesota the highest-taxed state in the nation.  And, yet another claims  to raise revenue by further relying on “sin”taxes and other regressive forms of taxation and cuts that affect lower-income citizens.  What possible combination of taxes and spending cuts exists that would get someone elected?

Solving the budget deficit will take fundamental, long-term change.  We have grown accustomed to receiving a plethora of public services at relatively low cost.  The federal government has managed to delay this problem by simply printing more money (and, somehow, at least so far, has managed to avoid rampant inflation).  The state and local governments do not have this option.  We have to balance our budgets annually.  “Trimming around the edges,” “cutting the fat,” and other well-worn clichés will not get the job done.  

County aids and city aids, for all of the attention that they receive, account for less than three percent of the biennial state budget. Eliminating those programs in their entirety would knock about $1 billion out of the $5.8 billion deficit.  Then what?  Meanwhile, property taxes will increase dramatically, as we have seen since 2003, the last time local aids were cut, and with recent state unallotments.

In Minnesota, we have tended to believe that “you get what you pay for.”  In boom times, we were fortunate enough to forget how much our valued public services really cost.  I do not envy the current slate of candidates.  Frankly, I am not sure why anyone would want that job right now.  It seems to be a no-win scenario for the winner.  

But, it is not all doom and gloom.  This is a great time to reprioritize simply because we have no other choice.  Perhaps government has grown beyond its ability to pay for itself.  “Rightsizing” means fewer roads, fewer cops, less school aid, and less subsidized health care.  Perhaps, taxing decisions are best kept local – cities, schools, and counties.  The state could slash its budget and let the local folks decide whether or not services can continue unabated.  Or, perhaps, it is to chip in more to keep things moving.  All are valid choices.  But, we have choose.

Voters, as Peterson mentions, must press the candidates to move past the catchphrases and slogans to give us real solutions.  Meanwhile, take the budget challenge at  Maybe you can give the candidates some good ideas.