Senate Budget Explained
March 13th, 2009 at 3:08 pm By John Van Hecke
Minnesota’s Senate Democrats are doing the right thing; it’s just a little hard to tell on first pass.
Senate Democrats released their budget targets on Thursday. In stark contrast to Governor Pawlenty, the Senate majority rejected the ideologically driven and intellectually vacuous “no new tax” approach by relying both on revenue increases and spending reductions to balance the state budget. Noting that wealthier households pay a much lower percentage of their income in state and local taxes than low- and middle-income households, Senate Tax Chair Tom Bakk said that the DFL majority intends to rely on increases in progressive income taxes to make sure that new revenues are generated fairly.
To the Senate majority’s credit, they seek to balance the upcoming biennium budget as well as re-establish sound, long term fiscal management. This approach is consistent with the bi-partisan State Budget Trends Commission’s recommendations.
In his budget, Governor Pawlenty achieves short-term budget balances through a variety of shifts, goofy borrowing schemes and creative accounting gimmicks. It’s a strategy that merely moves much of the state’s budget problems into the future. The Senate’s approach, although more difficult in the short term, is more responsible policy.
On the downside, the Senate’s proposed cut to education is too deep and undermines the state’s investment in the future. Inflation adjusted per pupil state aid to Minnesota school districts has fallen significantly since FY 2003; under current law, real state aid to school districts will continue to fall from the current biennium (FY 2008-09) to the next (FY 2010-11). By cutting state funding to schools by nearly $1 billion, the Senate DFL is contributing to an even further deterioration in funding for Minnesota public schools.
I’m not crazy about the school cuts but the Senate is proposing to do the difficult and correct thing. We can’t simply push today’s problems, as Governor Pawlenty recommends, off until tomorrow. This is a big step in the right direction.
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I would like to point out that education funding has decreased 14% since 2003. Education has been sacrificing for years. To present the idea that 7% shared cuts is the “right thing to do” does not take this into account. So really, what you are asking is for education to take basically a 21% cut since 2003. That does not seem fair to me. Remember, you are not asking school districts to sacrifice. You are asking CHILDREN to sacrifice. Do we usually ask children to sacrifice their future because the adults do not put children first?
In the hurried rush to defend the DFL, a few kids might get pushed out the window. Just the way it goes. Eggs, omelette, etc…
So the “DFL majority intends to rely on increases in progressive income taxes to make sure that new revenues are generated fairly”. The problem with progressives and progressive tax policy is that sooner of later you run out of “other peoples money.”
Bernie, Do you honestly believe we can cut our way entirely out of a $6.4 billion deficit? We sure as heck can’t tax our way entirely out of it. We need a balanced approach here. Where would you find new revenue?
Hello Chris. Here is what I believe. Instead of the “war on success” being propagated by think tanks like yours you should be demanding accountability for government spending. There is one government employee for every 14 Minnesotans. Our state government spending is out of control. Governments, like individuals and families, have to live within their means, spending on have to haves, and dropping the nice to haves. Government needs to drop the nice to haves. That is where I would find the revenue. The top 10% of taxpayers are now paying 57% of all state income taxes. This is not an infinite resource. Maybe tax burdens should be levied on the basis of government services. Those successful 10% don’t use 57% of government services. Everyone in this country has the same starting line to success. Progressives seem to want everyone to have the same finish line. That is the equivalent to giving trophies out to every 3rd grader in the league. Before we build another 1 million dollar dog park or bike trail, or invest in light rail for certain urban liberals the government owes the citizens of this state a detailed accounting of where our tax dollars are being spent. And then they need to spend those tax dollars wisely.
Nobody here is expecting everyone to have the same finish line. Minnesota 2020, and progressives in general, are for equality of opportunity. Every Minnesotan should have an opportunity to succeed. First-class public schools, colleges, and universities across the state, a great transportation infrastructure, and affordable health care are critical to that. Reality dictates that we need taxes to pay for those. We believe those taxes should be progressive in nature, those who can afford to pay more should. (To whom much is given, much is expected.)
When everyone has opportunities to succeed, we all do better. Thanks for getting a discussion going.
I really think we both want the same thing Chris but we see the solution from different points of view. In my opinion your comment “to whom much is given, much is expected” is a Robin Hood mentality and I would submit that successful individuals earn their success, it is not given to them, and if government services contribute to that success they are the same services provided to every Minnesotan. Both conservatives and progressives should demand financial accountability from government. The DFL has just proposed that the Minnesota tax code be changed to cap Mortgage interest deductions at $420. Education credits from tutoring to music lessons will vanish. Refundable credits for day care would also disappear. The details are in an article in today’s Star Tribune. This does not sound like progressive taxation to me. Either does the increase in gas tax and sales tax. Who do these taxes impact the most? Instead of debating ideological differences we should focus our collective energy on demanding that our elected officials spend our tax dollars prudently.