For more information contact: Michael Howard 651-296-8873
Minnesota's challenges this year - our slowing economy, rising unemployment, massive road repair needs - demands we make responsible budget decisions at the State Capitol. But if we are to get the most "bang for our buck", we need to consider how the choices we make today will affect the choices we must face tomorrow. The current issues facing Minnesota are instructive as to why this is so critical.
Our slumping economy and rising unemployment illustrate our need to value long-term planning and investment. For years, Minnesota's economy has been a nation leader. But last year, Minnesota's unemployment average rose above the national average for the first time on record. After decades ranked near the top on personal income growth, Minnesota has fallen to near the bottom. Why is Minnesota losing its economic competitive edge?
According to State Economist Tom Stinson, Minnesota has been a national economic leader for decades, in large part because of consistent state investment in education, and research and design. As a result, Minnesota has continued to have one of most highly skilled workforces in the country, but that might not last. In 1972, Minnesota ranked 20th nationally in academic research and design per capita. In 2004, we ranked 40th.
Most people agree Minnesota needs to do something about our mounting transportation problems. As evidence this week, the non-partisan Office of Legislative Auditor released a report documenting the grim state of our highways and bridges. The report documented a widening gap in the amount of bad bridges and roads, and the funds we have collected to fix them. The study pointed to the reduction in gas tax revenue as a chief reason for the funding shortfall. It was last increased twenty years ago, and because of inflation, has reduced in value by about 40%.
The problem was clearly evident by 2002, and instead of addressing it directly, we began borrowing, or bonding, amounting to band-aids on a broken bone. Today, our state debt from bonding for roads and bridges has increased over 650% in the last five years, and we are still $2.4 billion per year behind in our ability to meet the repair needs for our roads.
We can never expect, or attempt, to fix every problem that our state faces with legislative action. But we cannot ignore, or sweep problems "under the rug" and pretend the mess isn’t there. As we have seen with transportation, the mess doesn’t go away, it just becomes harder to clean up.
On transportation, it is critical we not only pass legislation that addresses our needs of our crumbling roads and bridges, but we should also pay-as-we-go, so we don’t pass billions in debt for future taxpayers to pay off. On education, we should renew our investment on every level. Evidence suggests the long-term dividends to that commitment can pave the way for decades of a competitive Minnesota workforce.
I believe it is quite clear that investment pays a dividend, and neglect yields diminished returns. For some time, we have been living off of depreciation, allowing our infrastructure (roads, schools, and nursing homes, etc.) to deteriorate. To allow the current trend to continue means allowing the state to fall further behind at a time when we face many challenges that must be addressed.
The important discussions we have on these issues must carefully contemplate how our current actions affect the future health and vitality of our state. No one has a crystal ball, so this isn’t an easy business. However, the lessons from our past are a helpful guide.