The Taxpayers Legaue of Minnesota

FOR IMMEDIATE RELEASE

January 22, 2007

Contact: David Strom
Ph: (651) 294-2590

Nine Point 3 Percent?!

Pawlenty’s too generous budget just the floor for negotiations; double-digit growth in state spending now inevitable

St Paul—Governor Pawlenty today proposed a budget with nearly $3 billion in new general fund spending—a 9.3% increase—making the proposed rate of growth nearly 3 times what it would be without Pawlenty’s new initiatives.

“It took my breath away,” said David Strom, President of the Taxpayers League of Minnesota. “9.3% isn’t just generous; it’s knocking on the door of spendthrift.”

Pawlenty’s budget proposal increases the level of state spending without raising general taxes. However, Pawlenty’s tax relief proposals use between 10 and 15% of the budget surplus, with the rest of the money going to new spending initiatives.

The biggest budget winners are slated to be K-12 education, Higher Education, and Health and Human Services. K-12 education will jump at a rate 4 times higher than planned in the prior budget (from a 1.8% rate of increase to 7.7%), or $985 million in new spending. Higher Education nets $453 million in new spending, for a 16.4% increase (almost 12 times the expected increase). HHS will see $1.285 billion in new spending, for a 15.6% increase (the projected increase was 13.5%).

“Spending increases at this level are simply unsustainable,” said Strom. “Spending money at this rate today may look enticing, but it simply sets us up for another larger budget crisis when the economy slows down.

“Governor Pawlenty has often pointed out that we can’t afford double-digit growth in health care spending forever, but his budget actually accelerated the rate of growth instead of moderating it. Simply because we don’t have to raise taxes today to pay for this spending doesn’t mean that we can afford the long-term expenses we are committing to today,” Strom added.

“Now is the time to reform our spending, using the surplus to smooth the path of reform; instead it looks like spending is going to go up much faster than we can afford in the long term.

“And if there is one thing we know, it’s that Pawlenty’s budget proposal is the floor, not the ceiling for spending growth,” Strom concluded.

The Taxpayers League is Minnesota’s largest taxpayer advocacy organization.