Sometimes I listen to the news and think, “I’m sure glad we aren’t California.” Sure, we face big budget deficits, but not astronomical budget deficits. Plus, we don’t have a bunch of constitutional amendments that tie the hands of policymakers trying to come up with a solution. We can be thankful that our elected officials have a whole range of tools at their disposal, even if they don’t always use them.
Well, you might want to think again. Two constitutional amendments introduced in the House on Thursday could vastly increase the level of legislative gridlock as policymakers struggle to negotiate compromises with an empty toolbox.
The first amendment, House File 1612, proposes to limit all state spending in the current budget cycle to the amount of all revenues that were brought in the door during the previous two-year budget cycle – an idea that was first proposed by former Governor Pawlenty back in 2009 and went nowhere in the legislature.
What exactly does the amendment do? Thanks to the economic recovery, in the FY 2012-13 biennium the state is projected to bring in $2.2 billion more in revenue from all sources than it did in the FY 2010-11 biennium. Under the amendment, however, the state would be prohibited from using that revenue to meet our needs. Keep in mind that the $5 billion deficit the state is currently facing assumes the state will use that revenue. The amendment would increase the size of the budget deficit, meaning policymakers might consider even deeper cuts to higher education or that education would no longer escape with light cuts.
What if Minnesotans don’t want to cut the state budget that deeply, fearful of what slashing spending for education, higher education and economic development might do to the future economic health of the state? Too bad – our elected officials’ hands are tied. Spending beyond that restricted level is only allowed if there is a declared national security or peacetime emergency. And raising revenues wouldn’t help either. The amendment doesn’t let us use any new revenue for at least another two years.
The effect for Minnesota’s economy would be disastrous. When tax collections fall in an economic downturn, those recession-level revenues are locked in and the state is forced to slash vital public services that families and businesses rely on. As the economy improves, the state can’t reinvest any of that revenue growth until years later.
Colorado passed a version of this amendment in 1992. By 2005, after a campaign spearheaded by a Republican governor and many business leaders, a majority of Coloradans voted to suspend the amendment for five years to slow down cuts that were devastating education, higher education and public health. Yesterday, the Republican governor of Arizona vetoed a similar proposal saying, “We should learn from the State of Colorado that experimented with a similar mechanism, an experiment that failed.”
A second constitutional amendment was introduced on Thursday in the House that could make things even more difficult for policymakers looking to pass a balanced budget. House File 1598 would require a three-fifths vote in both bodies of the legislature to pass revenue increases. Remember, policymakers have two primary tools that can help the state balance the budget over the long-term – cutting spending and raising revenues. This amendment would essentially take one of those tools off the table, increasing gridlock as policymakers struggle to find common ground. (The amendment is scheduled for a hearing in the House Tax committee on Monday, May 2nd.)
This legislative session has shown us first-hand how challenging it is to resolve state deficits through an all-cuts approach. That task would become near impossible if these constitutional amendments were to take effect.
There are many other concerns with the proposed amendments that we’ll discuss in the coming days. Hopefully, policymakers will quickly begin to understand how permanently placing such restrictions in the state’s constitution would create gridlock and force radical spending reductions that would quickly erode the very qualities that have made Minnesota so successful in the past – a highly educated workforce and a strong public infrastructure. We’ve already proven that we don’t need constitutional amendments to get policymakers to cut spending.
-Christina Wessel
