Dear Neighbors,
In this edition,
1. Looking Back, Looking to the Future
2. Where We Go From Here
1. Looking Back, Looking to the Future
Reeling off complex facts and figures is common practice at the Capitol. Unfortunately, it is also common practice for legislators to convey information in a way that is not digestible—or relevant—to our friends and neighbors back home.
I often find that having a visual is helpful, particularly when it relates to the budget issues here in St. Paul. The table below contains a side-by-side comparison of 2011, today, and the projected Fiscal Years 2014-2015.
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2011
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2012-13
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2014-15
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-$6.2 billion deficit
(Fall 2010)
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+$2.5 billion surplus
(Projected for ‘12-13)
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The projected $4.4 billion shortfall for the biennium was significantly reduced and is now only $1.1 billion.
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7% unemployment
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5.5% unemployment
(As of 12/12)
(National: 7.8%)
55,000 jobs created in 2012
61,000 new businesses registered in 2012
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According to state economists, many businesses are nervous because of uncertainty from the global to the local level, and believe it prudent to delay investment and hiring decisions until some of the uncertainty is resolved.
That being said, we in the Legislature should work on smart reforms to encourage growth in the private economy, rather than increasing taxes that would danger new job creation.
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Government spending set to grow by 22%
(180% over the decade)
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Spending slowed, set at a sustainable 6%
Every month revenues consistently exceed budget forecasts.
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Without raising taxes in 2011-2012, tax collections are projected to increase by $1.7 billion under the existing budget.
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School shift 70/30
$2 billion delay in payments to schools set by the DFL Legislature in 2010.
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60/40 in 2011 (compromise between Legislature and governor)
64/36 in March 2012 (using surplus funds)
82.5/17.5 in December 2012
($1.6 billion paid back using surplus funds)
Today:
$1.1 billion remains from what the DFL borrowed in 2010.
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The new DFL majority’s priority bill, House File 1, would set the aid entitlement schedule to the standard 90/10 beginning FY14. This would still leave about $555 million in property tax recognition shift unpaid. However, the bill has does not contain a funding mechanism.
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2. Where We Go From Here
As noted above, state economists in November said that many businesses are nervous to hire and grow because of uncertainty from the global to the local level. I believe this is an important indicator as to how we should determine our priorities for the people of Minnesota.
I believe it is safe to say that a more fiscally conservative approach has worked and will continue to work to grow the private economy and get more Minnesotans back to work which, in itself, will provide more revenue to our state without raising taxes.
Tens of billions of dollars in tax increases would endanger new job creation. As you can see, we were able to balance the budget without raising taxes. We also paid back our debt and still provided important state services to Minnesotans. We had to make tough decisions, but the economy is responding and we must work to sustain this upward trajectory.
Governor Dayton will release his budget tomorrow, which will set the tone for budget talks throughout the spring. As GOP Lead of the Government Operations Committee, I look forward to working with my colleagues across the aisle on smart policy and finance initiatives that will help make government smarter and more accountable, all the while helping to drive further growth in our economy.
As always, feel free to contact me at any time. I am here to serve the people and priorities of our district.
Have a great week,
Joyce