In a commentary in Monday’s Star Tribune, State Representative and gubernatorial candidate Tom Emmer proclaimed:
The Democrats in the Legislature need to know and understand that we are facing another huge budget deficit. They should know better than anyone, because they caused most of this problem with their belief that all of Minnesota’s problems are best solved with more government programs.
The partisan dig in Rep. Emmer’s comment — that Democrats “need to know and understand” that we have a deficit — is standard political mudslinging and too silly to be taken seriously. Anyone who has read a newspaper in the last several months knows that all state policymakers of both parties “understand” that we a confronting a massive deficit, although they disagree about the solution.
The more notable fallacy in Rep. Emmer’s remark is that the state budget morass is somehow the result of “more government programs.” In fact, real (i.e., inflation-adjusted) state general fund spending has fallen by 8.5 percent from FY 2002-03 to FY 2008-09. (Real per capita state general fund spending is expected to decline by another 10.5 percent from FY 2008-09 to FY 2010-11, although much of this decline is somewhat artificial insofar as it is the result of the infusion of federal recovery dollars combined with school funding shifts.) The decline in real per capita general fund spending is proof that the deficit is not the result of “more government programs.”
It is certainly true that general fund spending is expected to shoot up in the FY 2012-13 biennium. However, even this growth is not the result of “more government programs,” but rather (1) the statutory requirement to pay back the recent school aid payment shift, (2) the disappearance of one-time federal recovery dollars, and (3) increases in health and human service costs driven by an aging state population and rising health care costs. It is more than a little disingenuous to lay these problems entirely at the feet of either Democrats or Republicans.
The “huge budget deficit” that Rep. Emmer references is largely the result of declining state revenues. From FY 2002-03 to FY 2008-09, real per capita state general fund revenue declined by 9.2 percent. Furthermore, this decline is not just the result of the economic turmoil of the last eighteen months; over a third of the revenue loss since FY 2002-03 occurred before the economic collapse of 2008. The origins of Minnesota’s economic problems can be traced back to 2002, when state policymakers on a tri-partisan basis agreed to takeover funding of general education costs without securing adequate resources to pay for them in the long-term.
With the state staring at massive deficits for the foreseeable future, spending cuts and reforms will need to be on the table. However, those who blame the state’s budget problems on “more government programs” need “to know and understand” that a sizeable portion of the state’s budget morass is the result of declining revenue. For this reason, revenue increases also need to be on the table.