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State Representative Joyce Peppin
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-7806
For more information contact: Austin Bleess 651-296-5529
NEWS COLUMN
THE LEGISLATURE MAXED OUT THE CREDIT CARD – AND THEN SOME
By Joyce Peppin
State Representative, District 32A
Anyone who uses a credit card knows it’s not a good idea to max it out if you can avoid it. After all, at some point you have to pay if off, and if it’s not timely you have to pay it off with steep interest. And worse, if you’re not careful it can really screw up your credit.
The same general concept holds true for the state of Minnesota’s “credit card.” Unfortunately, many members of the Minnesota Legislature don’t see it that way. As a result, the Minnesota House recently passed a bonding bill that would put $966 million on the state credit card. The Senate version was even worse, putting a whopping $986 million on the credit card.
These numbers are particularly troubling because they violate the state’s three percent debt limit rule. The three percent debt limit rule is a long-standing Minnesota tradition that limits state borrowing to not more than three percent of the state’s general fund, which would mean $825 million for this biennium.
This three-percent debt limit has been agreed upon and followed by both parties for more than two decades to keep the state from borrowing too much money. The policy has been successful and has allowed the state to maintain a AAA credit rating, which allows the state to borrow money at the lowest interest rates possible. It also makes sure the state doesn’t end up in a situation where we have to raise taxes or risk not being able to pay off debts. To ignore the three percent debt limit now would put our bond rating in jeopardy and would be a huge mistake.
So what exactly are we risking our state’s credit rating on by using the charge card for $986 million? Certainly many worthy projects, but also projects that don’t rise to a level of need worthy of putting our bond rating in jeopardy, such as hockey rinks, polar bear and gorilla exhibits, and a high speed rail to Chicago. It is projects like these that should be stripped from the bonding bill.
We should be focusing on priorities that have state or regional significance like repairing roads and bridges, ensuring or waste water treatment centers are working, keeping criminals behind bars, protecting our families, and investing in education.
It is my hope that when the bonding bill comes back to the House floor for a final vote it will be far below $986 million, and hopefully below $825 million. But I’m not sure the majority party in the state of Minnesota is committed to maintaining our outstanding credit rating. Please know that I have always and will continue to fight for our priorities and fiscal responsibility in St. Paul, even if it goes against the majority.
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