OPINION | Who will win the budget showdown?


Governor Pawlenty released his state biennial budget first, followed by the State Senate majority caucus and then, lastly, by the State House of Representatives majority caucus. They offer three substantially different approaches to tax policy, spending priorities and budget deficit resolution. None provide any real reason to cheer but at least we know who proposes what.

If the State Capitol were a casino, the croupier is calling, “les jeux sont faites.”

“Les jeux sont faites” essentially translates as “the bets have been placed.” If you watch the film “Casablanca,” the roulette croupier, working the illegal-yet-permitted casino in Rick’s Cafe’ Americain, cries this phrase just before spinning the wheel and releasing the ball.

In other words, the action is about to commence.

These three proposals outline three distinctly different visions for Minnesota. Governor Pawlenty wants dramatic spending cuts, including major reductions in aid to local governments; borrowing/bonding gimmicks; accounting shifts; and no tax increases. Since spending cuts alone fail to balance his budget, Pawlenty relies on “one time” money to achieve the required outcome.

“One time” money is better understood as non-recurring revenue. This financing stream certainly meets a balanced budget’s accounting requirements but it allows unsustainable spending unless revenues increase.

The State Senate majority supports a 7% across the board spending cut, combined with tax increases. Their proposal argues that, in light of the $6.4 billion budget deficit, equal cuts, combined with a progressive tax structure, is the fairest solution. This is a seemingly logically consistent idea, that pain should be shared.

However, after six years of ideologically conservative budgets and state government restructuring, the present shared pain isn’t truly shared because funding priorities aren’t equal. The State Senate plan fundamentally reinforces Governor Pawlenty’s vision of state government. Yes, it raises taxes, but it commits Minnesota to a narrow, lesser vision of itself.

The State House of Representatives’ budget also raises taxes but prioritizes cuts and, like the Governor, would use one-time financial shifts to reach a balance. Unlike the State Senate, the State House proposal tries to minimize or neutralize educational budget cuts. This is somewhat misleading; given rising costs, allocations must similarly rise unless costs are reduced. A stagnant allocation, unadjusted for inflation, is a reduction.

My Minnesota 2020 colleague Jeff Van Wychen regularly explores tax policy’s consequences, advocating for a progressive tax structure that achieves the greatest collective state good. I’m not going to retread his path except to say that I agree with him and you should, too.

Rather, I’m concerned with these three proposals’ future direction for Minnesota. Pawlenty seeks reduced government in every form. His proposed biennial budget clearly reflects his ideological perspective. It’s a deceptively dangerous vision, rooted in moving Minnesota to perpetual mediocrity.

The State Senate’s vision, as I noted above, tries to put a better spin on Pawlenty’s priorities. The State House plan, via a different mechanism, does the same. No one is proposing a budget that reflects Minnesota’s repeatedly stated policy priorities. No one has a vision for moving Minnesota forward.

The budget debate’s naked legislative, deal-cutting, endgame politics suggest a grim outcome. The legislative chambers, due to the State House’s 87 vote majority, cannot override a gubernatorial veto without three additional minority caucus votes. I don’t believe three minority caucus votes will join the majority, yielding a veto override.

A depressing question remains: will the legislature collapse, surrendering to Governor Pawlenty before the May 18th legislative session termination date or will it collapse later, during a special legislative session?

It doesn’t have to be this way but I think, regretfully, for this year and next, it likely will. Minnesota’s public policy leaders are poised to fail Minnesotans again.

Les jeux sont faites.