I’d hoped that I wouldn’t have to send out this newsletter. I’d hoped that the negotiations under the “cone of silence” at the end of June would yield a resolution to the state budget impasse as both sides stared into the abyss. I’d hoped that once we went into a government shutdown, if that was what was needed to spark movement, that it would be brief. I’m sorry that it has gone on this long and doesn’t seem to have a quick solution in sight. We now stand with 22,000 state workers out of work, an unknown number of nonprofit and private sector workers laid off, and more to come if this stalemate continues. State parks are closed, important services for Minnesotans are shuttered.
So how did we get here? Last November voters narrowly elected a GOP legislative majority and narrowly elected a DFL Governor. Both sides argue that they have a mandate from the voters to carry out the promises they made in the election campaign.
The November 2010 budget forecast predicted a $6.2 billion dollar budget deficit. The February 2011 forecast lowered that to $5 billion. Maintaining current state service levels, accounting for changes such as increased students in the state school system but not factoring in inflation, would require a budget of $39 billion. Revenues are anticipated to be $34 billion. The Governor initially proposed a budget of $37 billion with a mix of service cuts and tax increases on higher income taxpayers. The GOP majority in the legislature proposed and then passed a $34 billion budget late in the legislative session that included no state tax increases and all service cuts.
In the last week of the session the Governor proposed a reduction in his budget to $35.8 billion and halved his proposed tax increase. The GOP legislative leadership has offered to rearrange some of the spending in their budget proposal but have held to the $34 billion as a cap. The final June 30th budget offers from both sides can be found here: http://tinyurl.com/642e9zs. In addition the GOP added a demand that a host of social and policy issues be a part of their proposal including new restrictions on abortion, bans on life-saving stem cell research, private school vouchers in the cities of the first class, their partisan proposal to redraw legislative and Congressional district lines, and other items. All of those items had been vetoed by the Governor previously.
As recently as yesterday the Governor proposed a budget with further reductions to approximately $35.5 billion. That proposal included part of the funding as a tax on the 7,700 Minnesota taxpayers who make more than $1 million a year. Half of those people are not Minnesota residents but are business people with interests in the state, professional athletes, and others. The GOP leadership described this proposal as a “step backwards”.
The GOP indicated last week a willingness to spend up over $35 billion but to fund that spending by borrowing the revenue needed. The two borrowing options on the table are increasing the shift in school funding — essentially borrowing from the schools — and selling bonds based on future tobacco tax revenues. While several times in state history we have delayed school payments to balance the state budget, we have never used borrowing to fund current spending. When Governor Pawlenty proposed it in 2009 it was bipartisanly and overwhelmingly rejected.
The current stand-off isn’t about taxes or no taxes but about which taxes and who pays them.
If the currently proposed GOP budget were to become law property taxes over the next four years would go up an additional $1.2 billion. Minneapolis taxpayers would pay a bulk of that given the repeated ways in which the central cities and Duluth are targeted for aid reductions in the current GOP proposals.
To get to a solution that balances the budget, puts state workers and private sector workers back to work and provides the services that Minnesotans want and need will require all sides to compromise. It will also require hard votes by legislators and decisions by the Governor. As he said before the end of the legislative session, compromise is when you agree to some things you don’t like so that you can agree to some things that you do. There will be a whole lot of things we don’t like about the budget before this is settled and over.
Judge Kathleen Gearin heard petitions from Attorney General Lori Swanson, Governor Dayton’s office and the Republicans at the end of June to determine what functions would operate during the shutdown. Judge Gearin’s ruling was very narrow in its scope and allowed only the most critical government operations to continue.
Judge Gearin appointed former Supreme Court Chief Justice Kathleen Blatz as Special Master. Justice Blatz’s responsibility is to hear further petitions from groups and entities that believe they are essential and should be allowed to continue. Court filings, hearings and ruling continue nearly every day of the shutdown and child care services, services for the blind and disabled, and many others, are looking for continued funding during the shutdown.
For more information please visit the MPR Shutdown Blog, Shutdown FAQ or http://bereadymn.com/ from Minnesota Management and Budget.
Elections, as we see here, have consequences. But they are not the sum total of a democracy. An engaged citizenry is also a key element. I urge you to engage the key leaders in this stalemate.
Speaker Zellers: email@example.com 651 296-5502
Majority Leader Koch: firstname.lastname@example.org 651 296-5981
Governor Dayton: http://mn.gov/governor/contact-us/form/ 651 201-3400.
Of course you can also offer your insight, feedback, questions and concerns to me. My office door in St. Paul is always open, or you can reach me by phone at 651-296-0173 or by email at email@example.com. Thank you for the honor of serving you in state government.