Accessibility menu
State Representative Sarah Anderson
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-5511
For more information contact: Jodi Boyne 651-296-0640
OP/ED COLUMN
ANDERSON: THE BUDGET FORECAST SETS THE SESSION AGENDA
Last week’s news that the state is facing a $373 million budget deficit left legislators and citizens with a lot of questions. Why do we have a deficit? How can we fix it? What does this mean for the 2008 legislative session? To answer these questions, here is a crash course in how the state budget works.
In odd-numbered years, the Legislature determines what it will spend on such things as education, transportation, and other items while at the same time figuring out what it will collect in taxes and fees. Then, a series of bills are passed to set a balanced state budget for the next two years. So in the 2007 session, we passed the budget for 2008-09. In 2009, we will pass a budget for 2010-11, and so on. If the economy changes significantly, which it has since we finished the 2007 session, the even-numbered year is used to make changes that keep the budget balanced.
There are numerous factors that contributed to the budget shortfall. The slumping housing market hit us especially hard according to Tom Stinson, the official state economist, because the lumber industry makes up a large part of our overall economy. To make matters worse, slow housing and rising interest rates mean fewer people are using home equity loans to finance their consumer spending, resulting in lower sales tax collections. Rising gasoline prices are also forcing us to pay more at the pump and further dampening our outlook. All of these factors contribute to slow job growth and shrinking profits which then ripple throughout the rest of the economy.
So how do we fix the problem? The Legislature will have to find a way to eliminate the deficit that does not add further damage to the economy. Stinson said we face some uncertainty with the pace of a recovery in the credit and oil markets and the housing situation will take a long time to right itself. Plus, we don’t have a lot of control over those things at the state government level.
We can, however, work to create jobs. Making Minnesota an attractive place to do business is important to achieving this goal. Passing a fiscally responsible bonding bill that addresses infrastructure needs will also help put thousands of people to work and get us through a slump that Stinson said usually lasts between six and nine months.
The budget shortfall also means the 2008 session will require a lot of fiscal restraint. Going out of our way to increase spending at a time when we struggle to pay for what we already have would be a risk not worth taking. It is fortunate that we did not pass the more than $5 billion worth of spending proposals made by some in 2007. If we had, we would be facing a $667 million deficit - almost double the amount we have now.
However the next session unfolds, I want you to know that I will be working with my colleagues from both sides of the aisle to find a solution that we can all agree on. I would also like to hear from you, as many of the best ideas come from the public. Please do not hesitate to share your thoughts with me on this, or any legislative issue that concerns you. You can email me at rep.sarah.anderson@house.mn or call my office at (651) 296-5511.
-30-
News Items
- Letter to the Editor - (Posted: 2012-02-20 00:00:00)
- Welcome to the 2012 Session - (Posted: 2012-01-31 00:00:00)
- REDISTRICTING ORGANIZATION TO WITHHOLD MAP FROM PUBLIC SCRUTINY - (Posted: 2011-10-14 00:00:00)
- Archived News Items
- Subscribe to RSS News Feeds
- Read more about RSS.