Editorial: State budget plans are shaky
Published 9:38 am Monday, April 15, 2013
The consensus coming from the Capitol in St. Paul is that Gov. Mark Dayton and the Legislature are about to jump into the nitty-gritty of the state’s next two-year budget plan. That’s great. The budget is their top priority.
Today this board offers its suggestions on the budget.
On the budget, the most important items for voters to follow are the total price tag, how much bigger that is than the current budget, and how/where the state will get the money to cover that difference.
Here is how this board sees those numbers:
• $38 billion — will be about the amount the DFL governor and DFL-led Legislature likely will want the state to spend the next two years.
• $35.2 billion — is the cost of this two-year budget, which expires June 30. However, in that period the state is taking in only about $34.6 billion, a $627 million shortfall.
In other words, to pay for a $38 billion plan covering the next two years the state will need to generate $3.4 billion more than it took in the past two years.
To cover that difference, Dayton generates about $1.8 billion from a variety of tax hikes, while House and Senate DFL plans raise more than $2 billion, although details about specific sources are vague.
Regardless, please note none of those plans covers the $3.4 billion jump from revenues received the past two years to what these leaders want to spend in the next two.
That should concern all Minnesotans as they hear about budget details in the coming weeks.
It’s not that this board opposes increases in education, transportation and the like. Paying for all-day kindergarten and repaying schools money taken to cover deficits should be top priorities. Most certainly, Interstate Highway 94 needs expansion east from St. Cloud.
And it’s not that this board opposes taxes. A broader, lower sales tax holds potential. Plus, taxing online sales should be done, not just to raise revenues but to level the playing field for businesses.
But building a budget that will spend about 10 percent more than what the state took in the previous budget cycle just doesn’t make sense, especially in a tepid economy and after Dayton himself vowed to put state budgeting on a path toward long-term fiscal stability.
Granted, tax hikes are part of that path. But even those proposed so far don’t fill that 10 percent gap. So is the expectation that economic growth the next two years will be enough? That come this time in 2015 lawmakers will face another shortfall? Or is there something missing?
As legislators and the governor put together their deals, answers are needed. Now, these plans offer anything but long-term stability.
— St. Cloud Times, April 6