Posted: 05/05/14 16:44
by Dave Mindeman
Maybe we should cut Scott Honour some slack. After all, this is his first foray into politics...but then, running for governor requires some serious policy approaches. And I don't quite get what Honour is trying to convey in his Op-Ed piece in the Pioneer Press. The link is below:
Scott Honour: A better amount for a bonding bill? Zero
Governor Dayton wants a billion dollar bonding bill. He says we can afford it and judging by the Minnesota economic numbers, we can. Scott Honour thinks ANY borrowing is not fiscally responsible.
A better amount for a bonding bill this year is zero, not $1 billion. For any critical priorities that require funding, use the budget surplus. If borrowing from future generations to spend it on politicians' pet projects were the key to prosperity, the streets would be paved with gold. Instead, our economy is stagnant and our debts have skyrocketed.
Well a zero bonding bill would make a lot of people counting on state projects for local communities pretty upset. Even the legislative Republicans think an $850 million bonding request is a responsible number. Worthington needs help. There are a number of civic projects that have been left behind because of recession. The state security hospital in St. Peter desperately needs an upgrade.
Actually Honour should be up front and supporting the Senate proposal. They take $200 million from the surplus and use it for Capitol projects. I would think Honour would be ecstatic about that.
Bonding bills are part of the state's fiscal management. We use bonds to leverage projects that don't fit the general fund budget. Minnesota has been responsible with this borrowing and it has been acted upon with budgetary restraint - especially during this recessionary period. But a backlog of projects has built up and with the state's economy looking better, this backlog can be addressed.
But since Honour's idea of fiscal management means limited borrowing - where was his outrage when the Republican legislature put together their budget during the last cycle.
Not only did they borrow $2 billion from the schools and force the local districts to pay the interest, but they put the state in more debt with the tobacco bonding portion of the budget. The GOP tacked on an extra $1 billion in debt obligation there. Funny - Honour never talks about that or maybe wasn't even interested at the time.
Honour criticizes Dayton's approach this way:
Gov. Dayton's approach is irresponsible for two key reasons. First, he is jeopardizing our economy by creating an even larger interest obligation, which will shrink the dollars available for the private sector to use to grow and create jobs. And second, he is placing an even greater burden on the next generation of taxpayers who will have to pay back these very large and growing debts.
If Honour would fully understand this decades long approach to fiscal management in Minnesota, he would realize that bonding projects create more jobs. They put money in the pockets of hard working Minnesotans and create more jobs as they return that money to the economy. The private sector benefits from this - it is not an additional burden.
And as for the next generation of taxpayers? Well, each of us in turn is paying down past investments. Much like a mortgage on a house, we get to utilize the fruits of those invesments now - investments that create more economic activity which the next generation can benefit from.
Honour is a money guy - he should understand the benefit of low interest borrowing that creates future wealth.
But then again, maybe he never has had to worry about cash flow.