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Legislative News and Views - Rep. Linda Runbeck (R)

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Before enacting new laws, let’s examine the unintended consequences

Monday, May 05, 2014

 

By Rep. Linda Runbeck

Nobody likes “surprises” that bring bad news. In the lawmaking scene at the state Capitol, those surprises often are called “unintended consequences.”

New legislation that sounds good on the surface may create more problems than it solves. Shouldn’t we investigate the unintended consequences thoroughly before passing new laws affecting millions of Minnesotans?

Take, for example, a 436-page omnibus finance bill that commits us to spending $1.2 billion through 2017. A significant percentage of this is $442 million more toward Obamacare. This is an addition to the current budget of $39 billion, which raised all-funds spending by $1,500 for every man, woman and child in Minnesota.

What are the unintended consequences of increasing spending at such a drastic rate? We just endured several years of dramatic revenue downturns from the recession before Republicans righted our spending and drove a $1.2 billion surplus. With the current majority’s historic spending increase having now taken root, Minnesota Management & Budget reported earlier this month that state revenue is below previous projections — for the first time in two years. Is this an indication that last year’s spending spree is eroding our fiscal course? Will commitments to future spending compromise our state’s bottom line and leave taxpayers on the hook for an even larger burden?

Then there is a recently passed increase in the minimum wage, up to $9.50 per hour for large employers by 2016. The unintended consequence is that raising the minimum wage eliminates jobs for the very people the hike is purported to assist. Economic studies show that for every 10 percent increase in the minimum wage, employment opportunities for low-skilled and young workers fall by 1-2 percent. In this case, a 31 percent increase beyond the federal minimum translates to a drop in employment opportunities of between 3 and 9 percent. That’s why I voted “no.” Many Republicans would have supported a more reasonable increase by matching the federal standard of $7.25.

A bullying bill which passed this session could bring many unintended consequences of its own. The bill overrides local school district control and discretion to deal with issues, tying the hands of local parents and school officials. If your child is accused of bullying or is bullied herself, it could go on a permanent record, and no parental notification is required. This takes decisions that should be in the hands of parents and others who know what’s best for their school and puts them in the hands of state bureaucrats. Furthermore, it exposes our schools to potential lawsuits and forces unfunded mandates on our districts.

We also have an unnecessary new $90 million Senate office complex in the works. This is $90 million in taxpayer money that could have been used for road work, gone to our schools or nursing homes. This is not so much unintended, simply another consequence for taxpayers as legislators build themselves new digs.

The ultimate unintended consequence thread that binds issues like these is that they impact our state’s tax code, making Minnesota less competitive. The “How Money Walks” website (www.how moneywalks.com) provides a look at how tax policy in our states and nation impact growth and development. There is an interesting interactive map available at that site. The correlation we can draw to our state is that enacting unprecedented tax increases in Minnesota to cover for historic spending hikes will only serve to drive out wealth.

These are things we should think about as we consider bills down the stretch in the 2014 session and beyond. We should be working to build prosperity in our state, not chasing it across our borders.

 

Rep. Linda Runbeck represents House District 38A.

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