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State Representative Andrew Falk
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4228
For more information contact: Sandy Connolly 651-296-8877
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HISTORIC DROP IN WAGES DOMINATES BUDGET FORECAST
Months of rising unemployment and declining wages have once again taken a toll on our state budget. Minnesota’s State Economist Tom Stinson revealed yesterday that Minnesota is facing an additional $1.2 billion budget deficit for the 2010-11 biennium. This comes on top of a $6.4 billion deficit hole that was filled last session. The structural shortfall for 2012-13 is projected to be $5.4 billion.
State Rep. Andrew Falk said that the news today is reflective of the struggles Minnesota families are facing.
“When you hear that Minnesotans are currently working fewer hours per week than at any time since the Great Depression, you understand quickly how deep this problem is and how much people are hurting," said Falk. “Seventy percent of the loss in state revenue is from declining income taxes collected, representing the biggest two-year drop in revenue since WWII. My top priority going into the next legislative session is on job creation.”
Falk said that state economists agree that a targeted Capital Investment bill could create as many as 10,000 new jobs for Minnesotans. Passage of a bonding bill will be one of the first tasks of the legislature when they reconvene in February.
“Part of being fiscally responsible is knowing when to make smart investments, beginning with a strong bonding bill. Many of the capital investment projects being considered are coming in significantly under previous bids, some as high as 30% to 40% lower than previously expected. Now is an excellent time to put people back to work rebuilding infrastructure that will serve our state for generations to come.”
The House Jobs Task Force and Small Business Caucus will also continue their work, listening to workers, business owners and employment experts on what they believe the state legislature can do to create jobs.
In the meantime, according to Falk, all options, including new revenue and spending cuts, need to be considered.
“While the report we heard today confirms our state has a revenue problem, not a spending problem, we know the Governor’s only plan of action to solve this deficit is cuts,” said Falk. “Cities, schools, hospitals and nursing homes have already been cut to the bone – it’s hard to imagine trimming another $1.2 billion without doing serious and permanent damage.”
At a recent leadership summit, former Governors Quie, Carlson (both Republicans), and Anderson (DFL) all agreed that the state needs new revenue. Falk said this is in direct contradiction to the current governor, who continues to advocate for the wealthiest individuals in Minnesotan, those making more than $250,000 (net) per year, to pay a lower effective tax-rate than working, middle-class Minnesotans.
Falk is also disappointed to hear that the first place the Governor is considering for cuts is Local Government Aid (LGA). With $400 million scheduled to go out to cities by the end of December, cuts now would leave local governments will little choice but to cut services or raise property taxes.
“Property taxes have increased by 63% since Governor Pawlenty took office,” said Falk. “It’s time he finds another way to balance the budget.”
More important, according to Falk, is to get the state back to the protecting the values that made this state great.
“These are certainly challenging times, but we have to maintain our commitment to the things we are responsible for – providing a great education for our kids, making health care affordable and accessible to everyone in the state, and providing a hand up to our neighbors when through no fault of their own they lose their job or face some kind of crisis.
Where will we be a few years from now if we continue to abandon these core values?”
News Items
- Budget Forecast: Major budget problems remain for 2014-15 Fiscal crisis in Washington creates uncertainty and concerns - (Posted: Dec 5 2012 12:00AM)
- Budget Forecast: Major budget problems remain for 2014-15 Fiscal crisis in Washington creates uncertainty and concerns - (Posted: 2012-12-05 00:00:00)
- 2012 SESSION WRAP UP - (Posted: 2012-07-05 00:00:00)
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