The Battle for Minnesota

Phil’s Take

It’s time to get political on you. I imagine most of you readers are somewhat plugged into the news. You may not read the NY Times or even the Strib regularly, but I’m sure you know we have a new president, a wicked recession on our hands, and a governor whose main interests appear to be his “no new taxes” pledge and positioning himself for national office.

A couple weeks ago Gov. T-Paw introduced his budget proposal for the 2009-2010 cycle. The way our state budget system works is the Governor introduces his proposal as a starting point in a budgetary conversation, then both chambers of the legislature work it over and pass separate versions, then a committee irons out the difference between the two, and finally it goes before the Governor. Interestingly it doesn’t need the Governor’s signature to pass, however he can pen a veto. Every two years we go through this business and it gets lots of airtime for the simple reason that nothing gets the blood running and the airwaves jabbering quite like a discussion about lots and lots of money, as you may have noticed in regards to the federal stimulus bill. Unlike the federal government, whose debt is in the trillions, the state is legally required to balance its budget.

Early on in his governorship, Pawlenty used a few accounting tricks, and the leveraging of “fees,” and money from the tobacco settlement to balance a fair-sized deficit. This year, we’re caught in an even worse situation. We don’t have the tobacco money to fall back on and those accounting tricks have caught up with us. Right now the state is looking at a $4.8 billion deficit that may climb to $6 billion or even $7 billion, heaven forbid.

The Governor’s budget proposal, made public a few weeks ago, depends on a huge infusion of money from Obama’s stimulus bill. Minnesota is expected to get handed between $3.5 and $4.5 billion, although don’t expect our head executive to be happy about it. No, he is complaining that it’s a poorly constructed bill with too much wasteful spending, never mind that it’s about to save his political ass. He is happy to take the money, no problems with that.

The real problem is that even with federal assistance, we still need cuts to existing programs or raised taxes to account for the remainder of the state deficit. We can’t do new taxes for a couple reasons: A) The “no taxes” pledge, and B) Most economists agree it’s pretty dumb policy to raise taxes during a recession. So those cuts are coming, and they will certainly affect our quality of life. For example, the recent call for a New Minnesota Miracle for our education system seems unlikely to result in any actual improvement to our schools.

As a result, life in Minnesota will almost certainly change. The Governor’s proposal includes a gigantic reduction in Local Government Aid (LGA). Most cities are run through two major funding streams: property taxes and LGA from the state. LGA acts as a great equalizer for the state. It helps pay for police, fire, libraries, and parks in our big cities and our rural hamlets. For small prairie towns, LGA guarantees these basic services. For Minneapolis and Saint Paul, LGA is nearly half the city budget.

Let me dig into this even more in regard to Saint Paul. The proposed cuts to LGA would lop $43.8 million out of the city’s approximate $200 million budget for the next two years. The combined budgets for Saint Paul’s libraries, recreation centers, and city attorney would only equal $34 million. Minneapolis faces a similarly dire situation. The Governor’s proposal and these cuts to LGA, if passed into law, would destroy much of what we love about our cities.

This is where we, the citizens of Minnesota, come in. We do not have to live this way and face the closure of our libraries and parks or the elimination of police officers and fire fighters. YOU can call or write your state legislators to encourage them to restore funding to LGA in the state budget. Save our cities: find their phone numbers and addresses at the state legislature’s website.