Accessibility menu
State Representative Tim Sanders
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4226
For more information contact: Austin Bleess 651-296-5529
NEWS COLUMN
ALREADY IN MASSIVE DEBT THE STATE GOES ON A SPENDING SPREE
By Tim Sanders
State Representative
Our state seems to have forgotten the basic principles of budgeting. They just keep spending money the state does not have.
Traditionally bonding bills are reserved for emergencies in the odd number year. This year, when we have an emergency with the flooding that occurred in the Moorhead area, the emergency projects are not even included in the bill. Frustratingly, we have pork projects taking precedence over emergencies.
For many years there was no bonding bill at all in the odd numbered years. The Legislature used to simply focus on setting a new state budget for the upcoming biennium. It seems that tradition is gone.
The recent bonding bill that passed the House was full of misplaced priorities, and no emergencies. At a time when our state is facing a $6.3 billion budget deficit, we should not be adding more debt to the state. We are simply spending more money for the sake of spending money.
To put it into personal terms it would look like this: You have a mortgage, along with an electric, phone, and maybe even a cable bill. There is the car payment every month. To top it off you’re already in credit card debt by $100,000. Instead of doing the responsible thing and getting a hold of your finances and paying down your debt, you go on a massive spending spree and put another $50,000 worth of frivolous items on your credit card.
Some legislators may try to justify the massive spending bill by saying it is a jobs bill. But looking at the appropriations in the bill, jobs are sitting at the very bottom. Out of $200 million that this bill totals, only $700,000 of the money is set aside to go towards Employment and Economic Development. That is less than 0.4% of the total bill! The projects that get the bulk of the money are simply wasteful spending.
Instead of focusing on jobs and job creation the bill is filled with misplaced priorities. They want to give $1 million so the state can buy wetlands. Also included in the bill was $4 million for the Minnesota Zoo. Over $33 million is earmarked for various trains around the state. While some of these projects may be nice to have, they are not emergencies. None of the projects are things that absolutely must get done now. They could wait until next year.
Aside from those reasons, we cannot even afford a bonding bill of $200 million. For 25 years, our state's guidelines have included a limit of 3 percent of the budget to service debt. Very old and yellow documents indicate that a policy limiting debt service to 2.5% of revenues was implemented in 1979. There is another document from 1984 showing a recommendation that it be increased to 3%. This is when the Department of Finance assumes the increase occurred. The guidelines, and our commitment to abiding by them, have helped us secure the highest possible bond ratings, which allow us to finance debt at the lowest possible interest rates. Forecasts projecting significantly less revenue have already moved us well above the 3% limit. By moving above the 3% limit we are risking our credit rating which means we would have to pay more in interest.
In this non-bonding year we should not be spending money the state does not have. We should not be distracting ourselves from the task at hand: balancing the $6.3 billion budget deficit.
-- 30 –
News Items
- March 30 Legislative Update - (Posted: 2012-03-30 00:00:00)
- March 16 Legislative Update - (Posted: 2012-03-16 00:00:00)
- March 2 Legislative Update - (Posted: 2012-03-02 00:00:00)
- Archived News Items
- Subscribe to RSS News Feeds
- Read more about RSS.