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Guest Column by Peggy Bennett

 

Last week, Minnesota’s economic experts released an updated state budget forecast. The good news is that this forecast shows significant improvement for our Minnesota economy which, according to analysts, is thanks to the huge influx of federal government coronavirus dollars into our state’s economy.  These increased federal dollars came largely in the form of stimulus money, increased Medical Assistance funding, and unemployment assistance.

In the current budget, we went from a $2.3 billion deficit to a $641 million surplus. In the 2022-2023 budget forecast, we went from a $4.7 billion deficit, to a $1.273 billion deficit.

Increased consumer purchases with federal stimulus dollars on things like electronics, furniture, and home improvement products brought us roughly $2 billion in higher-than-expected tax revenue collections for Minnesota.  Along with this revenue increase, our state had much lower than expected expenditures – mostly in health and human services spending.  This is largely due to the temporary increase in federal Medical Assistance funding for COVID, along with less consumer use of health care services.

While I am extremely happy with this budget news, I approach it with a tone of caution. All the drivers for this forecasted economic upturn are temporary.  The improved budget is being mostly driven by extra federal dollars. They will eventually go away, as will the decreased use of our health care system. 

This is all the more reason to get our local businesses safely open so that our economy can be driven by consumer’s own paychecks and not borrowed federal dollars.

All of this is useful information to have as we return to session in January, where our top priority will be to set the 2022-2023 budget.  As I have mentioned before, my goal is to make sure the legislature protects the core responsibilities of state government from any potential budget cuts – important core government functions like education, public safety, and caring for the vulnerable such as people in nursing homes.

Determining what programs are effective is also going to be incredibly important considering the deficit our state is facing.  We need to bring common sense to our state budget.  There are so many government programs that are not working and provide little benefit to our state.  It’s time for us to eliminate these ineffective programs once and for all and continue to fund the programs that actually help people.

The small surplus that we have for our current biennium will be helpful.  I would much prefer this surplus be carried over to help with the upcoming deficit for next year.  However, I feel there is an immediate crisis due to the government lockdowns in Minnesota that must be addressed.

We need to provide help for the small businesses and their workers who have been impacted the most by the forced closures ordered by our governor.  Many are at the brink of permanent closure and their employees are left without an income. This is especially impactful for small communities like ours in rural Minnesota where every business is an essential economic driver and an essential employer.  The one-size-fits-all coronavirus plan for our state has been devastating.

We can all argue on the COVID battle effectiveness, or lack thereof, in closing our restaurants, gyms, fitness centers, and more. (I will definitely argue against it because the data simply does not support the closures.)  However, in the end we need to recognize that small businesses and their employees, and the people of the communities they reside in, are all suffering greatly from the fallout of these government decisions and we need to help them.

I believe government has a duty to fix the problems it causes, and so I am working with my legislative colleagues on legislation to come up with a package to assist small businesses and their employees which we hope to be offered yet in December.

To fix what our state and country have gone through with this pandemic, the federal government has massively increased our deficit and our state has taken a hard-economic hit.  Whether we agree or not on how the pandemic has been handled, in the end we all still need to work together.  Let’s roll up our sleeves and do the best for our communities.

Peggy Bennett, R-Albert Lea, is the District 27A representative.