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State Representative Joyce Peppin
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-7806
For more information contact: House GOP Communications 651-296-5520
NEWS COLUMN
February Budget Forecast
Dear Neighbors,
Minnesotans have reason to be optimistic: our state’s economy is growing, and our budget is improving.
In this edition:
1. February Budget Forecast Update
2. State Government Reform
1. February Budget Forecast Update
On Wednesday, economists from the Office of Minnesota Management and Budget released the February Budget Forecast, revealing that we have a second consecutive surplus. The projected surplus of $876 million last November has expanded by another $323 million.
Just one year ago, we entered the legislative session with a $5.1 billion deficit. We had to make some tough decisions, but through wise fiscal management, we have generated $1.2 billion in surplus funds.
Our $6.3 billion turnaround underscores the fact Minnesota had a spending problem, not a revenue problem as some have asserted. At the outset of last year’s legislative session, state government spending was projected to increase by an unsustainable 22% that even a strong economy could not afford. In only one year, the new legislature was able to curb that rate to a manageable 6%, all the while providing long-term spending restraint and creating opportunities for private sector job growth.
Stronger than expected revenue growth is responsible for $93 million of our recent projected forecast. This growth is not attributable to new taxes, but to a growing economy that allows hard-working families and employers to succeed. This is evidenced by Minnesota’s December unemployment rate of 5.7% compared to the 8.5% national average. In addition Minnesota’s rate appears to be falling faster than the national average. In fact, Minnesota added 15,500 private sector jobs in January. This job growth may have been hindered had we raised taxes by billions as some proposed last year, and it was achieved without tax-and-spend stimulus plans.
The monies in our surplus will go to replenish our state’s budget reserves and cash flow account, as well as begin to pay back the K-12 education shift that has been in place for several years. Some will be quick to diminish this favorable forecast by saying that we still have bills to pay. I would argue that we have money in the bank – we’ve refilled our “savings” and have enough to continue paying the bills. This is simply a start to the responsible use and maintenance of our state funds.
The best remedy for continued economic recovery is to restrain government spending and promote policies that encourage private sector economic growth. This legislative session our efforts are on reforms that will create a business- and entrepreneur-friendly climate by decreasing regulation, lowering taxes, and reforming government bureaucracy. In the end, we want to generate long-term employment, not short-term contracts, for the hard-working people of Minnesota.
Several reform initiatives are moving through the committee process, and I invite you to visit our Reform 2.0 website’s bill tracker to learn more these bills.
2. State Government Reform
Yesterday, the House passed state government reforms that will begin to bring responsibility back to government.
On a bi-partisan vote, the House passed a responsible and forward-looking bill that would require state agencies to plan for possible federal insolvency or the denial of federal payments in their budgets. Almost 30% (or $17.8 billion) of our state’s biennial budget is dependent upon federal funds. Representative Keith Downey, the author of the bill, called it a “common-sense risk management technique,” citing the historic federal debt and frequent partisan gridlock in Washington, D.C.
The House also passed an important reform measure that would increase the maximum award for state employees who put forward efforts to reduce the costs of operating state government or ideas for providing better or more efficient state services. The program, called “gain sharing,” is designed to incentivize state employees to find cost savings. Gain sharing programs are fairly common in private sector companies where they are used to boost morale and create a team environment. The bill passed with considerable bi-partisan support.
We also passed bills that will prevent state agencies from being able to craft rules that burden their opponents (often small businesses) during court cases, permit the Department of Administration to outsource waste management duties for the State Capitol complex, and remove the statutory age limit (age 22) for public employee interns.
As Chair of the Government Operations and Elections Committee, I have heard testimony on many beneficial reforms that are still making their way through the committee process. I look forward to debating them on the House floor.
Thank you for the honor and privilege of serving District 32A in the Minnesota House of Representatives. Please feel free to contact me at any time.
Have a great weekend,
Joyce
News Items
- PEPPIN REPORT: NW SUBURBAN FAMILIES WILL BE HIT HARD UNDER DAYTON AND DFL BUDGET - (Posted: May 28 2013 4:35PM)
- Rep. Peppin’s bill would lessen unfair fiscal disparities tax burden on Rogers - (Posted: Apr 3 2013 9:36AM)
- PEPPIN REPORT: FEBRUARY FORECAST REVEALS FOURTH CONSECUTIVE STATE SURPLUS - (Posted: Feb 28 2013 12:00AM)
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