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Tuesday Talk: What should MN do with $825 million?

December 10, 2013 By Joe Sheeran, Communications Director

Minnesota’s projected $825 million surplus is welcome news. While it’s early in the biennium, and a lot could change, working from a surplus instead of a deficit provides Minnesota policymakers with a wider range of options when they meet next year.

There are many suggestions on how the state should allocate the funds, from beefing up the reserve account to repealing some controversial business-to-business taxes passed last session to better investing in transportation and human services.

Today we want to hear from you. What should Minnesota do with this unexpected revenue? To help guide the discussion, we’ve invited experts from the fields of human services, transportation, and education.

What do you think is the best way to allocate the surplus?

Ask the experts where it will be used best.   

 

Post your comments or questions in the box below, scroll down to see the ongoing conversation, and use "refresh" to see new comments.

Thanks for participating! Commenting on this conversation is now closed.

61 Comments:

  • Bruce says:

    December 10, 2013 at 8:45 am

    The should put it K12 education, if not they are sure to start cutting in the schools again.

    • Michael Diedrich says:

      December 10, 2013 at 9:36 am

      I agree that we can’t let up on K-12. We’ve started the climb out of the hole Pawlenty dug, but we’ve still got a way to go if we’re going to have the schools we want.

  • Amelia Kroeger says:

    December 10, 2013 at 8:52 am

    In my view the most long-term effective way to use any surplus is to invest in all manner of tax credits, structured progressively, for residential and business solar installations.

    MN could decide to lead the way among our states on renewable energy alternatives in order to begin to get prepared for the ramifications of climate change.

  • Joe says:

    December 10, 2013 at 9:00 am

    Welcome to Tuesday Talk. Mike Gude from ARC and Dave Van Hattum from Transit for Livable Communities will join us shortly.

  • Steve Larson says:

    December 10, 2013 at 9:01 am

    Caregivers of persons with disabilities and older Minnesotans have not received an increase in wages in over 5 years. This has caused higher turnover of caregivers. We need to spend $86 million to correct this situation.

  • Dave VanHattum says:

    December 10, 2013 at 9:02 am

    Transportation mostly relies on off budget
    User fees. Like the rest of state investments
    Transportation needs a long-term, sustainable
    Funding source. Investments in transportation
    help grow the economy and reduce pocketbook
    Expenses.

  • Joe says:

    December 10, 2013 at 9:05 am

    Dave, what specifically should we be investing in?

    • Dave Van Hattum says:

      December 10, 2013 at 9:28 am

      We need to invest in maintaining our state’s crumbling roads and bridges, safety improvements-especially on many Greater Minnesota highway corridors, and expanding transit options statewide (e.g. bus, rail, bicycling and walking).

  • Bob MacNeal says:

    December 10, 2013 at 9:08 am

    Cut tuition at the University of Minnesota

    • Michael Diedrich says:

      December 10, 2013 at 9:39 am

      This would be a good plan, and I’d also suggest sharing some of it with the MnSCU system as well. About a third of jobs in the coming years will go to people with somewhere between a certificate and an associate’s degree, and we can’t let MnSCU be a forgotten partner in all this.

      Minnesota has some of the highest student debt rates in the country, and finding ways to reduce that should definitely be a priority.

      • Bob MacNeal says:

        December 10, 2013 at 9:42 am

        Good point. We should not forget MnSCU

    • Joe says:

      December 10, 2013 at 9:39 am

      How about MnSCU and boarding fees?

  • Carol Pass says:

    December 10, 2013 at 9:08 am

    Education- lower University costs and hire more teachers to lower classroom size, bulk-up schools with computers and higher quality learning in every way,

    Raise the minimum wage- families can barely afford rent and food, Families deteriorate under the present economic pressure, then discord produces low school performance, and with parents working so much no one is home to provide homework help and household order (used to be called discipline) Kids must raise themselves in lower income families. We need to track what really makes for healthy productive families..children. I am involved with many low income families and can see the anger, violence and just lack of order that is happening from continuous deepening poverty. The minimum wage has dropped relative to everything else for years. It can’t continue without serious societal damage on every level…crime, homelessness, family violence.

    • Michael Diedrich says:

      December 10, 2013 at 9:42 am

      I agree with your priorities, Carol. One thing we should be sure to price in when we invest in technology is ensuring staff have the training, support, and time to really adapt the way they teach using the new technology. Otherwise, it will take more time to realize the technology’s potential, since a rushed job means many teachers will start out doing pretty much what they were before, only this time with a shiny screen in front of the kids. There might be a short-term engagement boost from that, but the real gains are in changing the way we teach to harness the disruptive power of the technology.

    • Hilary Reeves says:

      December 10, 2013 at 10:23 am

      Thanks for Carol’s comments about the stresses in lower-income families. I just want to add that transportation is THE biggest cost in households earning $20k-$50k per year—more than education, more than health care. The cost of getting around is a real burden on families and a real opportunity (if more choices exist, like taking transit) to save money. Currently, tho, only 10-50% of jobs are conveniently accessible by transit in the metro. And by convenient, that’s a bus with a frequency of at least 1/2 hour, running six days a week. Adding more bus coverage & frequency really helps swing shift workers. The new Red Line BRT in the south metro, for instance, means early-shift workers at the airport now have a way to get there via transit on time. Too many jobs are not on transit. We need to build a system with better access AND make sure new jobs are positioned in locations accessible to transit. This can save money and ease stress.

  • Mike Gude says:

    December 10, 2013 at 9:09 am

    Increasing funding for community services for people with disabilities and older Minnesotans is one item of unfinished business from the 2013 Legislative Session.  Nursing homes received a much-needed five percent increase in funding, but community services for those with disabilities or who are seniors received only a one percent increase.  As Steve Larson mentioned, the wages for direct care staff serving people with disabilities have been stagnant for five years and are already low.  The average wage for a direct service staff in 2013 is $11.55, and the yearly earnings exceed the Federal Poverty Guideline by only $500 for a family of four. The median wage for these workers decreased 5% from 2002‐2012; while inflation increased 28% over the same period.

  • Dave Van Hattum says:

    December 10, 2013 at 9:16 am

    Minnesota’s transportation system needs a long-term, sustainable funding source. But nearly all state transportation funding is off budget, i.e. paid for with user fees.  To fix the state’s crumbling roads and bridges, and to provide equitable access to opportunity, Minnesota needs a long-term, sustainable funding source for transportation, much like the recent comprehensive solution to the state general fund budget.

    • Joe says:

      December 10, 2013 at 9:41 am

      Are there sustainable funding streams transportation advocates have identified and used in other areas?

      • Dave Van Hattum says:

        December 10, 2013 at 10:17 am

        These topics are interelated.  An improved transportation system will attract employers and people to Minnesota, helping to grow the economy.  And expanded transit options helps with family finances. For low-come households, transportation expenses often exceed expenditures on housing.  By using transit, families can save $5,000 or more per year. Better transit also improves access to jobs. Less personal spending on transportation, makes higher education and housing more affordable.

  • Mike C says:

    December 10, 2013 at 9:17 am

    Do nothing with it. Pay off debt and nothing else.

  • Mike Gude says:

    December 10, 2013 at 9:18 am

    I apologize for the delay in joining all of you.  By way of introduction, I’m a communications team member for The 5% Campaign.  We’re a statewide coalition of groups representing people with disabilities and older Minnesotans calling for a 5% increase in funding for those services that help some of our most vulnerable citizens stay independent and be part of their communities.  I also work as communications director for The Arc Minnesota, one of the 103 organizations supporting The 5% Campaign.  Thanks, Joe, for inviting me, Dave, and all your readers to take part in this discussion.

  • Rachel says:

    December 10, 2013 at 9:18 am

    From Bev (via email):

    USE IT TO FIX OUR INFRASTRUCTURE OR ELSE SAVE IT SAVE IT!  DO NOT GIVE IT BACK.  REMEMBER WHAT HAPPENED WHEN VENTURA DID THAT?  ALSO SADLY, I F THE REPUBLICANS GET BACK IN - THEY’LL NOT USE IT FOR INFRASTRUCTURE WHICH IS SO BADLY NEEDED.

  • Dave Van Hattum says:

    December 10, 2013 at 9:24 am

    In the view of my organization, Transit for Livable Communities, transportation should be a high priority for the legislature next session. To really deal with transportation it will take an approach that funds all modes of transportation across the Twin Cities metro and Greater Minnesota.  Urgent transportation needs include repairing crumbling roads and bridges across the state, safety improvements-especially on many Greater Mn highway corridors, and expanding transit options (e.g. bus, rail, bicycling and walking).

  • Mike Gude says:

    December 10, 2013 at 9:46 am

    Community‐based services that support people with disabilities help them develop strong job skills and gain experience so they have more opportunities for employment.  They also provides support to those who want to give back to their communities through volunteer work.  In our office, those services provide the support to a gentleman with disabilities who does our custodial work twice a week.  The services have also supported three individuals with disabilities who have come to our office and helped with a variety of office tasks over the past three years.  Their efforts have freed up those of us on staff so we can concentrate on our regular jobs.

  • Michael Diedrich says:

    December 10, 2013 at 9:48 am

    Good morning, everyone. Sorry for being a bit late jumping in.

    I think infrastructure of all sorts is going to need to be a priority. Dave VanHattum’s right that transportation should be pretty much at the top of that list. If we can spare it, I’d also like to see some money going into educational infrastructure, especially school facilities (many of which are in need of repair, renovation, or retrofit) and improved broadband Internet access both in and out of school. Those who have raised the tuition issue with regard to our public colleges and universities are also getting at another important area for our state.

  • Bob MacNeal says:

    December 10, 2013 at 9:49 am

    College scholarship fund for STEM fields of study (science, technology, engineering, & mathematics).

  • Joseph F Owens says:

    December 10, 2013 at 9:53 am

    Education Education Education.  K through 12 and MN colleges and universities.

  • Sean says:

    December 10, 2013 at 9:56 am

    Repeal the B2B taxes for starters.  Any move towards B2B taxes should be part of a larger, more comprehensive tax reform package, which didn’t occur in the last session.  It will also remove a potentially potent issue in the 2014 election.

    Next, I would favor investments in transportation, as others have noted.

  • Charlie Oakes says:

    December 10, 2013 at 10:12 am

    Since group homes and day programs haven’t had an increase in 6 years they have 50% turnover each year due to low wages, I believe that at least $86 Million should give these direct care employees a 5% raise and it would be their first wage increase since 2008.

  • Mike Gude says:

    December 10, 2013 at 10:13 am

    Additional funding for community-based services for people with disabilities and older Minnesotans is not only a good investment in them and in the staff who support them.  This funding is also a good investment in our communities.  Community-based services employ 90,800 Minnesotans, a major economic engine in Minnesota cities and towns.

    • Charlie Oakes says:

      December 10, 2013 at 1:47 pm

      Thanks Mike!

  • Willow Feigum says:

    December 10, 2013 at 10:14 am

    Pay the schools back and then save whatever is left in case of another downturn.

    • Michael Diedrich says:

      December 10, 2013 at 10:19 am

      My understanding is that the $825 million is what’s left after the schools are paid back. While I think saving some of it could make sense, investing some of it in Minnesota is one way to keep the recovery going and help avert another downturn.

    • Dave Van Hattum says:

      December 10, 2013 at 10:28 am

      In transportation, now is the time to plan for future downturns as well.  Minnesota, and the nation, have put off basic road maintenance for far too long.  Fixing our state’s roads and bridges in a timely fashion will save money over the long-run. Also expanded bicycling, walking and transit options promote active lifestyles thereby reducing long-term health care costs.

  • Mike Downing says:

    December 10, 2013 at 10:55 am

    Government surpluses should simply go back to the taxpayers who paid the the excess taxes in the first place… Taxpayers can more efficiently spend this money than government.

  • kay kessel says:

    December 10, 2013 at 11:41 am

    I participated in a group call with President Eric Kahler, U of Mn.  I would encourage President Kahler and Governor Dayton to bring together the University’s brightest minds from the Sustainable Agriculture, Food Science, Medical fields, Education, and Environmental Sciences to remove the toxic chemicals in our soil, air, food, water, and bodies that have caused the increase in disabilities such as Autism.  Bring in Prof John Peterson Meyers, from Berkeley to describe the research on minute amounts of BPA and so many other chemicals that not only cause birth defects, but are in our bodies so that the aging Minnesotans have increasing disabling conditions such as Alzheimers, Parkinsons, MS,cancer and many others.

    Fifty years ago I taught at the Cooperative School Rehabilitation Center, a research project established to teach vocational and living skills to developmentally disabled students ages 16-21.  There were two siblings that were born with PKU and if the science had been known they would not be very mentally handicapped.  We made great strides but now fifty years later, I am overwhelmed with the passion and energy to convince our legislators, and everyone that we need to support the parents with their beloved children born with disabilities and connect them right in the hospital or in the Pediatrician’s office, and early childhood programs. At the same time we need to change our habits so that we can prevent the crisis in our state. I heard from a parent who first described her life as lonely.  Not until her child with autism went to the Mpls Public Schools and found great support in the schools did she break away from that loneliness.  I want all Minnesotans to know that the schools and the teachers and support staff should be celebrated.  Thankfully, Governor Dayton and our legislators are committed to early childhood, all day kindergarten, more time for ESL services.  It is time for research, bringing together the brightest and caring minds to prevent, intervene and improve the lives for all Minn. families. 

    My husband had a stroke eleven years ago, two weeks after I retired.  I have been a 24 hour Caregiver and know the loneliness.  I have also participated in the volunteering and helping make connections for other Caregivers and in this day of technology, there shouldn’t be up to the young parents of disabled children or caregivers to find the resources and support needed.

  • tom larsen says:

    December 10, 2013 at 11:46 am

    Start a state bank
    Sane savings and loan. Electronic financial services.
    Save the state and all within it from Wall St. profiteers and keep the value here!

  • Russ DeFauw says:

    December 10, 2013 at 11:47 am

    Increase budget reserves. Minnesota should never again be ” borrowing ” from school funds. Strong budget reserves can play active role in making economic cycles smoother. During strong periods our economy does not need additional stimulus from tax cuts or rebates. During downturns increased state spending for infrastructure, repair, and education projects can provide needed stimulative effects - and often at lower project costs than would prevail during peak economic periods.
    To extent possible with present bond structures paying off / down existing state debt early can have similar balancing effects as state capital project borrowing could also then be increased during economic downturns.
    Unless the present volatile state tax approach is modified in the future strong budget reserves / debt reductions should be an integral component of state budget planning!

  • Frank H. says:

    December 10, 2013 at 11:56 am

    [IF it happens as projected] I agree with those who say pay-off the remainder of the state’s longterm debts to the Schools (et al.), sock some away in Minnesota’s “rainy-day fund,” direct some at tuition-relief for higher-ed students, and focus much of the remainder at our alternative-energy future (e.g. homeowner rebates for installation of solar panels).  While businesses have their legitimate tax concerns, those were well-debated in the recent legislative past, and don’t all need to be revisited at the first sign of a surplus.

  • Teamsters Local 320 says:

    December 10, 2013 at 12:19 pm

    The state should increase its contributions to MSRS and subsidize increases for local governments and school districts to increase employer contributions to PERA and the Teachers’ funds.

  • Jack Shelton says:

    December 10, 2013 at 12:23 pm

    Chart a line from when education was ‘great’ in Minnesota until present reflecting the rate of increase we’ve given the federal military budget, then allocate that amount proportionately to pre-K - 12 and university budgets (both U of M and MNSCU). If there is any left left over. . .throw it to the wind through a tax break for bottom of middle-class. Nothing to corporations or wealthy! We don’t need it.

  • Stephen says:

    December 10, 2013 at 12:30 pm

    How about just saving it? Why is it we stress when we have a deficit and spend like drunken sailors when we have a surplus. Act like responsible households, build an emergency fund and then when issues occur the government can weather the fiscal storm.

    • John says:

      December 10, 2013 at 4:15 pm

      Yes, then maybe the temporary 3% sales tax wouldn’t be 7+ and climbing with no end in sight.

  • Ginny says:

    December 10, 2013 at 12:38 pm

    I was happy to see all the comments from people who urge investment in education, transportation, and the like, and in various ways of helping the people who need help. The rest should be put into financial investments, for “rainy days” which are sure to come. (Remember what happened after Ventura decided to give back the so-called surprlus? The consequences were not surprising.

  • Jake from MSP says:

    December 10, 2013 at 1:15 pm

    Depending on the more long-term projections, I would advocate for reducing the state income tax on the top tax brackets at least somewhat, because I do find it a bit ridiculous that we are the 4th highest taxed state now.

    Secondly, (although I’m very biased here) I would advocate for a substantial tuition cut to in-state U of M students. When compared to other states’ Universities, it becomes quite apparent that MN gives one of the smallest tuition breaks to in-state students. The spread between in-state and out-of-state tuition is almost embarrassing, especially at the law school and it reduces incentive to attend here. For example, the University of Iowa’s Law School (#26 - US News) has cut tuition to a point that out-of-state law school tuition is now less expensive than the University of Minnesota Law School’s (#19 - US News) IN-STATE tuition. Ridiculous.

  • Tara Fortune says:

    December 10, 2013 at 1:38 pm

    Fund the future: Invest in educational programming such as dual language and immersion education as a means to address Minnesota’s achievement gap AND need for globally competitive citizens who are able to enter the world economy with strong academics and high-level language and culture skills.

  • Joan Tangen says:

    December 10, 2013 at 1:46 pm

    I have just learned that while we paid the funding owed to schools that we are underfunding education.  I think the money should go to eduction.  There is a great need to fund more of the university costs so students have less of a debt load upon graduation.  Education is an important investment in our future.  I was a student during the late 50’s and early 60’s and it was a stretch then.

  • Donald N Bungum says:

    December 10, 2013 at 2:42 pm

    Save it for needs that will come in the next legislative session or for the rainy day fund.  Education could always use more funding.

  • Kim Landecker says:

    December 10, 2013 at 3:35 pm

    After just coming back from the National Career and Technical Education Conference, I feel that the money would best be used by funding our public schools and post-secondary schools with the technology that is coming.  We will not be able to compete in this global economy with our students if they don’t have the technology needed to move forward.

    Thank you,

  • Ronald Leurquin says:

    December 10, 2013 at 4:29 pm

    My opinion is that it would be best to spread that surplus around to a variety of things:
    1. Infrastructure bing the first, so roads, bridges, transit, fix and improve them
    2. Education, better fund our K-12 system, and then better fund higher ed (U of M as well as MnSCU
    3. Rainy day funds, put some aside for when times are lean and taxes not coming in as well as now
    4. Tax incentives for renewable energy systems
    5. One time rax rebates if the above happen first

    I dont want to see any cuts to taxes YET, lets hold off on that for a year or two and get MN into a better financial situation before we do that.  I also dont want to see a lot of NEW spending, we have enough that is and needs to be done wtihout coming up with new ideas to spend.

    I noticed a few comments about Jessie and the taxes under his watch.  Keep in mind he did one time tax rebates, several times since the tax cash flow in MN was quite good back then.  It was the last year of that one time rebates that the extra was spit between the tax cut republicans, the new spendign democrats and the one time rebate governor.  My opinion is Jessie did it right and the other two did it wrong.  When you cut, its hard to go back and raise.  When you add spending its hard to go back and cut.

    We need our electeds to give this time of abundance a chance to bet just that, plan for the future, and give good evaluation to our tax structure and how that should (if it needs to) change.  I’m thinking there are plenty of bad taxes out there that could be changed.  Perhaps its a lot of the tax avoidance opportunities ALL of us like.  Well, we like the ones we get and hate the ones everyone else gets.  Were all to quick to cut things we dont like or participate in and keep what we like and do participate in.  WE are supposeldy a collecitive society and should view things with THE GREATER GOOD as a guiding principle.  WE need a governement of some sort, and thats going to need some sort of funding, and right now that seems to be taxes.

    So, my hope is that the abundance is kept and spread out wisely over all the things MN needs to make it a great place again (and get rid of some of the rust thats accumulated over the years of neglect).

  • Lyelle Palmer, Ph.D. says:

    December 10, 2013 at 5:27 pm

    No. 1 Pay what is owed to the school districts and end paying interest to banks.

  • Dan Freese says:

    December 10, 2013 at 7:54 pm

    Surplus $ need to be channelled into reducing tuition costs for post secondary education. Starting a fund for free tuition for college and trade schhols would be the best investment in our state’s economy.

  • S Smukler says:

    December 10, 2013 at 11:21 pm

    Affordable housing, affordable housing, affordable housing and supportive housing!  and by affordable I mean at below the poverty rate.

  • JS says:

    December 10, 2013 at 11:41 pm

    Reinstate revenue sharing to the cities, reinstate the Minnesota Miracle, and provide genuine residential property tax reform.

  • Dennis Holman says:

    December 11, 2013 at 4:06 am

    RETURN the surplus to the citizens of Minnesota from whom it was wrested!

  • carl brookins says:

    December 11, 2013 at 9:52 am

    After paying down the debt owed our school children, some should be allocated to increasing the state’s reserve fund. It’s only prudent, although that may be a word not in most activist’s vocabulary.

  • Sherry B. Olson says:

    December 11, 2013 at 6:54 pm

    Look at the 5% increase for people with disabilities and the staff who support them. We continue to have cuts in this area. I am supervisor and I have worked in this field for 20 years. We always do more with less after the budget comes out. In rural MN I would say the average wage for a DSP is well below the $ 11.55 quoted from ARRM. I know I started at $ 7.7/hr. 20 years ago and the staff I hire now are only making $ 9.38/hr. Turnover in this field is HUGE and we need to show the staff who support our individuals that they are an important of these people’s lives! 5% should go the people with disabilities.

  • Yi Li You says:

    December 12, 2013 at 7:16 am

    I am wondering where is this surplus coming from? For past years, MN is in bad deficit. Even state government shut down for a few weeks last summer (2012).

    Is this ” surplus ” coming from federal fund, from Medicaid, Obama care, etc? If so, that is not a real surplus.

    If it is surplus, state should resume some of the Medicaid and EMA coverage.
    Currently for MA and MNcare recipients, they cannot have 2 times of dental cleaning per year, except seniors who are on MSHO program since 2012.

    And deep cleaning is cut off from all MA, MNcare recipients. No endodontal treatment, like root canal, etc since 2012.
    All EMA coverage not resumed from 2010, worse after 2012.

    If there is a real surplus, state should consider to recover above services.
    But make sure not resume above services without collecting some copays. Otherwise, state will face severe deficit again.

    I suggest following:
    1. Resume deep cleaning services for MA, MNcare recipients, but collect $200 copay for full mouth of deep cleaning:
    2. Resume root canal and all other endodontal treatments, but collect 20% treatment copay, which recipients are affordable. Since 2010, no coverage for these services. Patients need to pay around $800 for root canal and about $900 for crown.
    3. Resume EMA coverage: resume coverage for those who are not eligible for MA, MNcare and they have urgent and chronical medical conditions that need daily medication treatments, such as: diabetes, hypertension, heart problem Hep B, Asthema, etc. Any illness that require daily medication treatments.
      But collect $10 to $50 monthly premium from these recipients, ask them to pay office copay of $3.00; $10 prescription copay if meds exceed $10.00.
      Currently most county workers refuse diabetes patients to be under EMA. They say: “diabetes is not emergent medical condition”. 

    Yi Li You, LSW
    E.D. of CSSC

  • Robert Eddy says:

    December 12, 2013 at 1:37 pm

    1. Pay off debt to schools and anywhere else.
    2. Have the 2014 Legislature use surplus in lieu of bonding money for infrastructure projects of all types, sanitary, water, transportation, college buildings, state buildings.
    3. How about some energy efficiency in state buildings and the addition of solar panels/wind generation on the buildings.

  • Sarah says:

    December 12, 2013 at 7:45 pm

    Please don’t forget about caregivers for persons with disabilities. Please don’t make us work 3 jobs in order to live. We know how much these people need us, and without wage increases more and more talented and educated caregivers are going to leave. Turnover in this field is a nightmare. It’s become a choice to live for yourself and your family or sacrifice and stay in this field, struggling financially. Please stop ignoring us. We need higher wages to keep good workers. Otherwise we will continually have inexperienced people working with people with highly specialized needs. This needs to be changed.

    • Yi Li You says:

      December 14, 2013 at 7:42 am

      I strongly agree with Sarah’s viewpoints. It is so hard to find a good worker who can work in home health or as a nursing assistant field. Because they are lowly paid job. The health care field, taking care of elderly, and disabled, become more and more important field. We need to take some measures to stop the “turn over” trend.
        maybe should do following:
        1) raise the wage level; M.A. and each health plan should increase reimbursement to PCA, home health care workers.
        2) Raise the credential standard for these job field, ask staff to renew their certificate or license, require continued education credits.
       
      So any staff who work in this field feel proud in working in this field.

      Yi Li You, LSW
      CSSC