MN Budget: Getting to “Apples to Apples” and Beyond

Minnesota Republicans have been talking a lot about their position on the state budget crisis lately.  It’s too bad that much of it is laced with distortions and comparisons that aren’t based in reality.

Frequently, you hear Republicans claim that last year’s state budget was $30 billion or $32 billion dollars.  That’s only partially true.  The state is projecting state revenues of $30.2 billion for the 2010-11 biennium — that’s the source of the “$30 billion” number. 

But that’s not all that’s included in the state budget.  Federal stimulus funding was used by the Legislature and then-Governor Pawlenty to fill holes in the budget.  On top of that, there was the K-12 payment shift that also saved money in the 2010-11 biennium.  Together, these items totaled over $4 billion.  So when you hear the $32 billion number cited, they are only counting one of those two items.

In fact, to get a true apples-to-apples comparison between the 2010-11 and 2012-13 budgets, you have to add the stimulus dollars and the shift dollars on top of the state revenue.  Why?  Because the federal stimulus dollars were not used to fund one-time projects — they were used to fund the ongoing operations of Minnesota state government.  We’re also not doing an additional K-12 shift in the 2012-13 biennium — school districts will receive payments per the normal schedule.

As such, the true 2010-11 budget is actually $34.5 billion.

Republicans don’t want to talk about this $34.5 billion number, because they are proposing a smaller budget — $34 billion — for 2012-13.  Poll after poll shows Minnesotans favor a blended approach of spending cuts and limited tax increases to solve the budget crisis. 

Republicans bristle when you point out that their budget is an “all-cuts” budget, but that’s exactly what it is.  While Gov. Dayton has been looking for compromise, Republicans have stubbornly stuck to their unpopular position.

Republicans would have you believe that $34 billion is a magic number.  Keep spending at that level, and everything will be OK.  They want to make the discussion about the numbers, ignoring the real-world impacts of what they propose.  Well, here’s a flavor of what in fact would happen:

At a time when our economy is still struggling, Republicans would undercut the state colleges and universities that provide the highly educated workforce that makes Minnesota a national leader.  Taking higher education funding back to 1999 levels is not how we stay competitive as a state.

At a time when labor markets are still working to recover, Republicans would cut more holes in the social safety net, kicking 138,000 people out of health care programs, slashing funding to Meals on Wheels, and refusing to pay for eyeglasses for people on MinnesotaCare.

Cuts to local governments would cause additional spikes in property taxes, as cities and counties would be forced to raise levies to make up for lost state funding — 4.3% on average.

Republicans have shown where their interests lie in this session:  property tax cuts for business, protecting the top 2% from paying their fair share of state and local taxes, making it harder for the elderly and college students to vote, and liability reform designed to make it harder for an average citizen to recover from a business that engages in fraudulent behavior.  Republicans are putting special interests and corporations ahead of the people.

These are not the policies that have made Minnesota great.  This is not the path we need to follow to move Minnesota forward.  It’s time for a balanced solution to our state budget.

UPDATE:  New polling released today shows that Minnesotans continue to show broad approval of Gov. Dayton’s budget proposal.


7 Responses to “MN Budget: Getting to “Apples to Apples” and Beyond”

  1. “Cuts to local governments would cause additional spikes in property taxes, as cities and counties would be forced to raise levies to make up for lost state funding — 4.3% on average.”

    That is not true.

    Local governments would have to choose between raising taxes and reducing spending. And what better place for such a decision? People making the choice would be analyzing local needs that they understand. They, could, for instance lay off a few of the coaches at the local school and run volunteer athletic programs instead. Issue resolved!

    • Yes, it’s true the decision would be forced down to the local level. But, you’ll find that meaningful cuts at the local levels are easier to come up with in theory than in practice. Laying off a couple of coaches at the school isn’t going to make up for the kinds of cuts that localities are facing.

      I should also point out that the incidence study looks at the history of similar aid cuts in the past and takes that into account –it only assumes that about two-thirds of the lost state funding will be made up for in the tax increases.

  2. OK. Let’s try some more creative solutions. The local media thinks the world is ending because Minnesota rest stops are closed. I’ll bet that if the reporters continued to the next exit and visited McDonald’s, they would find a big spike in business (and state sales tax revenue!) Truckers can pull in at the nearby Walmart parking lot. Problem solved. The rest areas were built 50 years ago when there were no convenience businesses near all the exit ramps.

    Better yet! Minnesota could sell the rest area property to the highest bidder, requiring the winner to put in 24-hour rest rooms. State would make a killing on the sale. And there would probably now be a nice restaurant/gas station complex conveniently located close to the freeway.

    It may be time to think outside the box!

    • Certainly I would agree we need to see more creativity when it comes to the budget.

      On the specific issue of rest areas, federal law currently prohibits privatization of rest areas on interstate highways, so such a step could only be taken on state highways.


  1. Leidiger’s E-Mail Torpedo of Not Really the Truth #2 | Brick City Blog - June 23, 2011

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