Posted: 12/06/13 00:10
by Dave Mindeman
Minnesota has a $1 billion surplus.
That is worth repeating....a $1 billion surplus. And now the politics of it will start to temper our enthusiasm. The MN GOP will try to figure out some way to take all the credit. The Governor will quickly explore an election year tax cut. But I would suggest that everybody please try to remember how we got here.
Governor Dayton has been in office for 2 budgets. One with the Republicans in charge of both Houses and the other with the Democrats in charge of both Houses.
The Democrats passed some tax increases which went into effect last July and account for some of that surplus. It certainly didn't "ruin" the economy as the MN GOP repeatedly stated.
But the session before that affected the current finances the most. So Republicans will attempt to take credit and make statements like this one made today....
Republicans in the Legislature.... were left to speculate about how much larger the surplus might have been had Democrats not raised taxes during the last session.
Now that makes absolutely no sense for two reasons. Democrats raising taxes did make the surplus larger. I don't know how you can dispute that. But secondly, and more to the GOP point of things, Dayton held the line on revenue when the Republicans passed their budget in the previous biennium.
He refused to continue the massive cutting and held the GOP to a stalemate on that principle. What the GOP ended up doing is allowing Dayton's revenue numbers but replacing a hefty portion of that revenue with borrowing....more debt.
Yes, they "allowed" Dayton's revenue by trading it for debt.... in the form of the school shifts and the tobacco bonding.
OK, let's be real about the numbers. No spinning this. Thankfully, the school shift money has been gradually repaid (by law) because of Minnesota's economic progress. And with this latest forecast the shift will be paid in full. That's great. But what if we had utilized Dayton's preferred idea of a modest tax on the rich as the revenue enhancement instead of borrowing from the schools? Logic dictates that the surplus would be bigger.
Then let's add in the tobacco bonding. Another GOP preference to additional revenue. The state is now under a $700 million bonding issue plus $500 million in interest. That's a $1.2 billion debt obligation alone and well, if you do the math, that means we technically do not have a surplus at all - just another $200 million deficit. If we had used taxes instead of bonding - how much more would the surplus be?
These are questions that should be self-evident - even to budget challenged MN Republicans.
But let's go back to Dayton's holding the line on revenue. The GOP wanted more cuts....which would have come at the expense of low income people via health and human services....at the expense of construction for infrastructure.....and education cuts in lieu of the school shift. That is what would have hurt the economy. Reducing purchasing power for lower income and middle class families and delaying education for the workforce and efficient movement of goods via a transportation system. Not to mention the construction jobs and health care jobs and education jobs that would not have happened under the full GOP plan.
It is interesting to note that there may be more GOP politicos who will make a run for Governor now - we might be adding Sen. Karin Housley to the mix - as well as a rethinking for Sen. Julie Rosen. How many would that be? Six candidates?
All these Republicans running against Dayton? On the economy?
Good luck with that. Minnesota has been lucky to have Dayton in charge and would be luckier still to give him 4 more years.