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State Representative Bob Dettmer
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4124
For more information contact: House GOP Communications 651-296-5520
NEWS COLUMN
The Revised Budget Forecast
By Bob Dettmer
State Representative
District 52A
St. Paul, MN—Minnesota Management and Budget (MMB) released their revised budget forecast on Tuesday, and while things look a bit better in the immediate future, they are still far from good. The projected deficit for the current fiscal year has dropped to $994 million. This is $209 million less than the November forecast, but, despite this change, Minnesota still faces major challenges. Reigning in spending and balancing the budget must remain our top priorities.
While the revised outlook is a small improvement, the long-term projections have gotten bleaker. The 2012-2013 budget shortfall is expected to be approximately $5.8 billion. That is almost $400 million more than original estimates. To combat this we have to reverse the trend of unsustainable spending increases each biennium.
State government needs an intervention. We have a spending problem. Next biennium revenue is expected to grow by 10 percent, but spending is expected to increase by 24 percent. It is not a matter of differing political philosophies—it’s simple economics. Government cannot increase spending at rates two and a half times greater than revenue increases.
Last month, Governor Pawlenty outlined his plan to bring the current budget back in line. With the new numbers released on Tuesday we now have more room to either negotiate cuts or put some money in the bank, but the Governor’s plan has its priorities in the right place. It protects public safety, veterans and K-12 education from spending cuts and reduces the long-term deficit by half.
Gov. Pawlenty’s plan also includes passing the Jobs Creation Bill he outlined in the State of the State address. It encourages business growth by reducing the corporate tax rate by 20 percent and allowing small businesses to exclude 20 percent of their income from taxation. The bill also provides tax credits for investing in business start-ups or research and development.
I agree with the Governor that job creation must be part of balancing the budget. With people losing their jobs or making less money, the state is taking in less revenue. Approximately 77 percent of the deficit is due to a decline in personal income taxes. We must put people back to work now. Minnesotans are struggling, tightening their belts and learning to live on less. The government must do the same. Raising taxes is not an option when more people are out of work or making less money.
Legislative leadership has been critical of Gov. Pawlenty’s plan, but they still haven’t proposed any of their own ideas to balance the budget. The Governor has asked for a proposal by March 17. It is my hope we can work together and come up with a solution quickly. I remain committed to reducing government spending and balancing the budget without raising taxes.
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