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At the May 18th conclusion of this year’s legislative session the mood, oddly, was one of triumph. As just about every local media outlet seemed happy to broadcast, Governor Pawlenty and DFL legislative leaders pronounced the 2008 session as one of the most productive in years.
Like marathon runners crossing the finish line there were accolades for those who had endured the arduous negotiations and the endless hours of debate. There was praise for the hard work and the product it had produced – a budget agreement that resolved the $935 million shortfall. But as the details of the deal that was decided behind closed doors came to light, the reality of the “miraculous” budget balancing act doesn’t seem to justify the celebration which the Governor and legislative leaders gave their compromise package.
The sad truth is that their much ballyhooed spending reductions amounted to a whopping total of $268 million. A figure which is less than 10% of the spending increases from 2007, and less than 1% of the total general fund budget of $34.5 billion. Next, factor into their budget solution spending increases of $137 million and you have a net spending reduction of only $131 million.
So how in the world can legislators claim to have balanced the books when a $935 million budget gap only results in $131 million in cuts?
The short answer is that they cooked the books. Their recipe is follows: First, drained $500 million from the state’s $653 million budget reserve account (i.e. the state savings account). Add in a $141 million tax increase on Minnesota businesses. Combine that with new fees totaling $51 million. And lastly, transfer $117 million from other accounts and, presto! – you have a budget solution. Well, at least you have a temporary budget solution. But in the world or government accounting that’s all you need.
However, what legislative leaders and the Governor didn’t explain as they rushed around the state proclaiming their budget balancing recipe is what will happen during the next budget cycle.
As a result of their lack of spending restraint, the projected budget shortfall for fiscal years 2010-2011 is $947 million. That’s a budgeting problem that is slightly larger than the one they just solved – if by solved you mean the six months between now and the next state budget forecast.
Yes, the real budget story is that the legislature and the Governor agreed to put off any real solution for our state budget until January 2009. So when all is said and done, more was said than done.
For Minnesotans, the most immediate outcome of the 2008 session was not solving the budget shortfall at all, but raising taxes by $6.6 billion and increasing they state’s debt by $820 million. Hardly what most citizens who are challenged with balancing their family budgets would term “successful.”
So as the campaign season begins in earnest for state House members, be prepared to ask the man or woman who comes requesting your vote this summer this question: Are you going to raise your taxes or reduce state spending in order to balance next year’s budget? Whatever the answer is, don’t let them tell you they did anything more than delay this year’s budget problem until next year. Or, as Wimpy of Popeye fame always stated, “I will gladly pay you Tuesday for a hamburger today!” |
