Shutdown Math Misleads Minnesota

The Minnesota Management and Budget Office’s State Government Shutdown report observes that lost state income revenue due to the shutdown was offset by laid-off worker wage savings. MMB’s report isn’t telling the whole story. In fact, it facilitates a misleading narrative suggesting no state harm.

Let’s get something straight: government shutdowns hurt people. Shutdowns undermine public confidence in community and the community services that people need and expect. Minnesota paid a short-term cost and is still paying a long-term cost for the summer shutdown.

That’s not the story that led the news, however.

The Star-Tribune’s story lede reads, “Minnesota's historic state government shutdown had essentially zero impact on the state budget.” Fox 9-TV concluded that “it’s a virtual wash.”

It’s similar to asking the question, “But other than that, Mrs. Lincoln, how did you like the play?”

The shutdown’s costs aren’t as simple, MMB Commissioner Jim Schowalter notes, as subtracting wage payment savings from anticipated but unrealized tax revenues. “We don’t have direct budget costs right now, but there are things that we are going to be dealing with for years to come.”

Despite these words, conservatives are having their cake and eating it, too.

Conservative legislative leaders wasted little time blaming Governor Dayton for the state government shutdown. Simultaneously, they’re relishing the reinforcement of their anti-government message. I imagine them saying, “See? We shut down government, saved $65 million in wages, lost $60 million in revenue but netted $5 million. Less government is profitable!”

Nothing could be further from the truth. The shutdown continued a conservative policy of unilateral cost-shifting. Wage-savings came from worker’s wallets. And just so we’re clear, wage payment suspension has direct community and business impacts as 19,000 state workers stopped spending money.

But, it goes further. The larger economic impact from curbed spending, delayed vendor payments, absent transactions and lost good will hasn’t been measured. Everyone touched by the shutdown bears the conservative unilateral cost-shifting burden. Conservative policy has been a disaster for Minnesota. We see the shutdown's evidence in skyrocketing local property taxes and in conservatives’ stubborn protection of Minnesota’s very highest income earners. Conservative policy is driving us backwards not moving Minnesota forward.

The state shutdown wasn’t a wash; it was an expensive, costly failure.

Posted in Fiscal Policy | Related Topics: State Budget  Government Shutdown  "No New Taxes"  Governor Dayton 

Subscribe to emails

Submit A Comment:

1 Comments: