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Minnesota 2020 Journal: When the Numbers Don’t Add Up

April 15, 2011 By John R. Van Hecke, Executive Director & Fellow

I’d like a trip to Paris, a cure for Muscular Dystrophy and a privately-funded Vikings Stadium. None of those things will happen any time soon but at least I’m not pretending otherwise. My keen grasp of the obvious differentiates me from Minnesota’s conservative elected state public policymakers.

I last visited Paris thirty years ago with my rural high school French class’ senior trip. For a southwestern Minnesota farm boy, it was an eye-opening experience. While I’ve quietly pined for a return, I’ve balanced that desire with my eagerness to see other parts of the world. In general, I prefer seeing new places rather than revisiting old ones.

Paris, like the world, has changed in 30 years. I’d like to visit again, reconnecting with my host family. From media reports, I know that Paris has diversified. More North African people live in the city and its suburbs than did a generation earlier. This shift is a regular source of cultural tension, occasionally flaring into ugly, violent demonstrations. Simultaneously, Paris remains an implacably eternal, supremely self-confident city.

Traveling to Paris, hotel accommodations and sundry expenses will probably cost me and my wife $5200 for a week. I’m not planning to stay at the George V but I’m no longer qualified for the youth hostel so $5200 isn’t out of the ball park. Funding this trip presents me with a challenge. Do I borrow the $5200, use $5200 from savings, or some combination of the two? Everyone routinely faces this choice, whether traveling on holiday or making a larger, lifestyle purchase.

While I seek opportunities to minimize expenses and maximize fun, the cost is, essentially, the cost. If I want to spend a week in Paris, I accept a minimum cost threshold. I don’t have the luxury of budgeting $5200, then insisting that, no, the amount is really only $4000. I can’t knock off twelve hundred bucks just because I’d really like to visit Paris again. If I do, my numbers won’t add up. This reality sets me apart from the Minnesota State Legislature’s conservative leadership.

Conservative state public policymakers have insisted, since the legislative session’s first day, that Minnesota’s $5.2 billion state budget deficit be balanced through budget cuts alone. They unilaterally reject revenue increases. After months of hectoring insistence that Minnesota’s government is out of control and that a little sober fiscal discipline will fix everything, conservative legislators have finally delivered their “cuts only” budget bill.

There’s just one problem. Their numbers don’t add up. They’re $1.2 billion short of the $5.2 billion budget deficit. In policy circles, we have a saying for just this situation: “that’s a pickle,” meaning conservative policymakers are confronting a conundrum.

Unsurprisingly, the State Legislature’s budget bill affirms a simple fiscal truth. While running counter to the conservative argument that the state budget deficit can be balanced through budget cuts alone, the conservative budget bill reveals that this approach come up short. Way short. $1.2 billion short. Minnesota’s budget deficit can’t be fixed through cuts alone.

Rather than raise taxes on Minnesota’s highest income earners, creating a more fairly shared tax burden, conservative policy leaders are stopping at nothing to protect their failed “no new taxes” policy. Well, they’re stopping at almost nothing. Since cuts alone only add up to $4 billion, that niggling $1.2 billion shortfall presents a head-scratcher. Having slashed school and healthcare funding to dangerous levels, conservative policy leaders are now realizing that they haven’t cut enough. Finding that next $1.2 billion means making brutally hard program choices.

Illustratively, conservative policymakers assume cost-savings from a federal healthcare enrollment requirement waiver. First, it’s unlikely that Governor Dayton would seek this waiver; it runs counter to Dayton’s affordable healthcare plans. Secondly, as a result of the first, it’s even more unlikely that the Obama Administration would grant the waiver. This difference accounts for $750 million of the $1.2 billion shortfall. While $750 million is a big number that could be attributed to fundamental policy approach differences, it also reinforces the larger conservative budget problem.

Their numbers don’t add up.

From our earliest days, Minnesota 2020 has advocated a balanced approach to state budget deficit resolution. Only tough budget cuts, combined with fair revenue increases, will move Minnesota off the budget deficit whip-saw. Creating jobs and growing our state economy, more than anything else, expands community prosperity. Hard choices, a fair tax approach, and strategic investments will get Minnesota’s economy moving.

Minnesota does best when we focus on what really matters: jobs, schools, healthcare and roads. Smart public policy leverages assets to create opportunity. Smart policy begins with accurate data. Every Minnesota family knows that wishful thinking can’t replace solid financial data. Wanting a trip to Paris, without the money required to realize it, will never get me there. Unfortunately, that’ a lesson lost on conservative policymakers.
 

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1 Comments:

  • Everett Flynn says:

    April 29, 2011 at 1:35 pm

    I’m just disappointed that the coverage of this issue in the local media doesn’t really come out and plainly call Republicans in the legislature out.  The Star Tribune had some decent editorials in the last week or so, but their compulsion to seem “balanced” in their perspective led them to lump Gov. Dayton in with the Republicans in the legislature and saying everyone is coming up short. 

    So, ok, while it may be true that all players are coming up short of some hypothetical ideal, Dayton is way, way taller than the Republicans in the legislature by any reasonable measure.  Why don’t local media paint a more accurate picture of how extreme is the position of Republicans?  Why are they so afraid to call a spade a spade?