The Governor will be releasing the details of his budget later this morning, but we already had a sneak peak of what’s to come in his State of the State speech last week. As we wait for the details, here are some initial thoughts.
Minnesota is not unique in facing budget shortfalls over the past few years. But a majority of states have taken a balanced approach to addressing these shortfalls, making budget cuts but also raising revenues. Relying on cuts alone makes it difficult for states to maintain adequate funding for health care, education, helping people who are out of work, and other services that Minnesotans are counting on more than ever in this tough economy.
The primary purpose of the Governor’s supplemental budget is to propose a solution to the state’s $1.2 billion deficit for the current biennium. We know the Governor’s plan will include significant budget cuts. In fact, the Governor warned that they will be ”very dramatic and painful spending reductions.”
We believe that it is critical that policymakers pass a budget this year that lays out a permanent solution to our deficit problems. And we appreciate that the Governor is leading us in that direction. However, any cure isn’t necessarily a good cure. Doctors used to “bleed” their patients, hoping that they were helping them heal by removing impurities from the body. Instead, doctors were really weakening their patients, making it more unlikely for them to recover. Minnesota is sick, but slashing programs that work to strengthen our economy over the long-term isn’t going to help us recover. It may fix the budget gap, but it will disable us in the future.
Bottom line: permanent revenue increases should be part of the solution. That’s the only way be can develop a responsible solution to the budget problem while preserving services that strengthen our communities.
In his State of the State, the Governor outlined a package of tax cuts he’s planning to include in his budget proposal. Given the size of the state’s deficit, it is surprising that the Governor would want to further reduce the state’s resources. We’ll be looking at the specifics of these proposals to make sure there is accountability – are the tax benefits specifically tied to job creation?
The Governor also mentioned his proposed constitutional amendment. As we’ve noted when this proposal first came out and when it was heard by the Senate Tax Committee, these kinds of amendments reduce accountability, undermine public participation in the budget process, have been rejected repeatedly by voters across the country and impede the state’s ability to provide adequate funding for services for the disabled, education, health care and transportation, and invest in our future prosperity.
We’ll have more analysis later this afternoon and in the days ahead after we see the details of the budget, which should be available at 11:00 today from the Minnesota Management and Budget web site.
-Nan Madden and Christina Wessel
