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State Representative Tim Kelly
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-8635
For more information contact: Jason Wenisch 651-296-2317
NEWS COLUMN
IGNORE REFORM NOW, EXPAND PROBLEMS LATER
On March 3, state economists released Minnesota’s February budget forecast and the results were expected: Minnesota continues to face a severe budget deficit of $4.57 billion. Some are saying this is good news because this total is down from the previous $4.8 billion projection. This information is deceiving at best.
Minnesota should really be facing a $6.393 billion budget deficit for Fiscal Year 2010-11. But if Minnesota relies on $1.8 billion in federal funds – which it will – the latest deficit projection stands at $4.57 billion.
Worse, the federal funding comes with strings attached. This means that budget reductions cannot happen in certain areas the federal government deems inappropriate, areas Minnesota was highly likely to make reforms simply because growth is unsustainable.
This one-time funding will be used to expand government, which creates its own set of problems. For example, under Governor Pawlenty’s initial budget recommendations, Minnesota’s Medical Assistance spending for Fiscal Year 2010 was going to be roughly $3 billion. With the strings attached to the federal match, that spending would increase $862 million for FY 2010, and another $497 million for FY 2011.
For Fiscal Year 2012, expected Medical Assistance spending (not including inflation) would total $4.2 billion. Yet those federal funds that expanded the size and scope of this program would be gone for good, and Minnesota would be left to backfill the financial hole left behind.
You can see we are entering into dangerous economic territory, and will only complicate our budget woes in the future by accepting this federal money, yet it’s going to happen. As a matter of fact, the state economists tell us that our next budget, for FY 2012-13 already shows a $5.133 billion budget deficit.
The problem is quite simple: Minnesota spends much more than it brings in. We are in a recession that is not likely to end this year, and I am concerned that we are not doing enough to reform government spending.
Lawmakers are fully aware of what lies ahead. We should be in serious discussions about how to permanently reduce our budget deficit, and we should be working from the $6.393 billion figure as opposed to $4.57 billion.
While the federal “stimulus” money looks good on paper, it’s only a temporary problem solver, and will only worsen our state’s budget and spending problems for decades to come.
We have to stop turning a blind eye to our spending woes. The time for true reform is right now.
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