State Budget Can’t Keep Up With Minnesotans


by Jeff Van Wychen | September 2, 2009 • In a recent e-mail to their members, the Taxpayers’ League of Minnesota expressed indignation and disbelief at the fact that “In the past 10 years the Minnesota state budget has grown by 60%.”  An examination of information from the website of Minnesota Management and Budget indicates that this claim is fairly accurate.  (Accuracy is something that one should not assume when dealing with the TLM, insofar as they have been known to sacrifice accuracy for the sake of a good sound bite.)

However, as the late Paul Harvey would say, now it’s time for the “rest of the story.”

Hindsight is the official blog of Minnesota 2020. Hindsight gives the run down on the news that jumps out at us on the issues that matter. Often times these stories show us how much further we need to go to have the progressive policy realized in Minnesota.

Growth in the state budget needs to be considered in light of inflation and population growth.  The combined rate of growth in inflation and population in Minnesota over the last ten years is approximately 65 percent.  In other words, based on the claim from the TLM, the growth in the state budget over the last decade failed to keep pace with inflation and population growth.  Real per capita state government spending has declined.

Incidentally, the measure of inflation used in this analysis is the implicit price deflator for state and local government purchases.  This is the same measure of inflation that has been endorsed by the state’s Council of Economic Advisors, Governor Pawlenty’s senior policy advisor, and former Tax Committee Chair and TLM President Phil Krinkie.

Furthermore, it is important to note that a portion of the growth in the state budget over the last ten years is the result of the state takeover of general education funding – a policy supported by the TLM.  This takeover did not result in growth in the size of government, but was merely a shift in how we paid for an existing government function – general education – away from local property taxes and into the state general fund.  The general education takeover increases state general fund spending by approximately $1 billion (6 percent) annually.

The Taxpayers’ League is in no position to rant about growth in the state budget, given that (1) the state budget has failed to keep pace with inflation and population growth over the last ten years and (2) the TLM supported the policy that contributed to a significant portion of state budget growth.