January 21, 2008

Of gubernatorial bondage

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Governor Pawlenty, how doth thou bonding proposal disappoint me? Let me count the ways.

At a Monday, January 14, State Capitol press conference, Pawlenty unveiled his $1.1 billion public works bonding plan, including $416 million in bridge replacement, highway spending, Minnesota’s required share of federal project matching funds and light rail transportation projects.

Opinion: Of gubernatorial bondage

Minnesota’s road and bridge maintenance deficit tops $1 billion. Pawlenty proposes $30 million for local highways and $225 million for bridge replacement, roughly one-quarter of back-logged need.

First, let’s call a spade, a spade.

There’s an important difference between on-going road and bridge maintenance, paid with the gas tax and other recurring revenue, and bonding-financed capital investments. We pay for upkeep with revenue-derived budgets. We borrow money to build, rebuild or replace.

Despite his declared fiscal conservative values, Governor Pawlenty repeatedly proposes financing the road and bridge maintenance mission with borrowed dollars. Bond repayment is a direct state budgetary outlay that reduces cash available for investments or programs. In simpler, homeowner terms: pay the mortgage first; live on what’s left. The bigger the mortgage, the less is leftover.

Pawlenty’s “no new taxes” policy is slowly reducing the revenue pool funding the state’s many activities. Bond payment obligations further reduce state funds, additionally strangling programs like school funding, healthcare, roads or economic development.

Counter-recessionary government spending, seeking marketplace stimulation, is a now-standard solution to a faltering economy. It’s a theory articulated by 20th century British economist John Maynard Keynes.

Keynes argued that government investment during recessionary periods will stimulate private growth and induce revived individual consumer confidence. Of course, it’s much more complicated than that but, fundamentally, Keynes believed that government spending, because government acts collectively rather than individually, was a critical economic growth tool.

Rhetorically, Pawlenty espouses laissez-faire economic theory, believing that government should not regulate or restrict the marketplace. Practically, though, he’s a Keynesian.

He is, however, a highly-selective Keynesian economics adherent. He’ll prime his preferred pumps while condemning or belittling everyone else’s because Pawlenty rewards his friends and punishes his enemies. Preserving a reduced income tax burden on Minnesota’s wealthiest individuals is Pawlenty’s priority, not growing our state.

Consequently, I wasn’t surprised by Pawlenty’s snarky Tuesday attack on Minnesota State Economist Tom Stinson.

National seasonally-adjusted unemployment statistics reveal that Minnesota’s unemployment rate is now worse than the nation’s. That’s a disturbing development. Minnesota’s numbers have outpaced that nation’s meaning that we’ve had a better state economy than the nation’s average.

Responding to questions, Stinson noted that, according to the National Bureau of Economic Statistics standards, Minnesota is in an economic recession. Pawlenty was not pleased because this hard truth is “off message.”

Rather than lead, the Governor lashed out. “Tom Stinson tends to be a bit on the pessimistic side of things, to put it charitably,” Pawlenty said.

While Pawlenty is exceptionally skilled at the verbal sting, we’re not distracted. We recognize that he’s defending his policy priorities. They are not ours.

Pawlenty will, I predict, remain unmoved by objective economic data. He has previously. Why should this moment be any different?

I remain disappointed with Pawlenty’s conservative public policy agenda and underwhelmed by his 2008 bonding proposals. 37 years ago, a very different Governor followed a very different path to economic growth.* It worked but required sacrifice, investment and consensus building, not snarky comments and insincere commitments.

This is not 1971. We need solutions that move Minnesota forward, focusing on what really matters: education, healthcare, transportation and economic development. We need real leadership. We need change now.

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