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Legislative News and Views - Rep. Steve Drazkowski (R)

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Wednesday, March 5, 2008
Recently state economists alerted state lawmakers that Minnesota not only faces a budget deficit, but it also must deal with an economic recession. Having experienced this news as a first-time lawmaker, believe me when I tell you that nothing takes the wind out of the sails of legislators when they’re told the cupboard is bare. The unwelcome economic news inevitably means tax hikes or budget cuts - choices most lawmakers would rather not face. The state’s latest projections show a $935 million deficit for the 2008-09 budget cycle. In addition, a $1.086 billion deficit is now projected for the 2010-11 budget cycle. According to the Department of Finance, individual and corporate income tax returns have shown the largest declines. Combined with the growing decline of the housing sector, rising oil prices, and tighter credit standards Minnesota will face its first recession in several years. Adding insult to injury, our new legislative leaders were given a $2 billion surplus this time last year. After spending that amount and raising overall state budget spending by ten percent, we are now nearly $1 billion in the hole just one short year later. Several years ago, Minnesota faced a whopping $4.5 billion budget deficit. Lawmakers decided then that the best method to eliminate this financial shortfall was to curb state spending and not raise state taxes. In hindsight, you could say the plan worked because those policies not only wiped out the deficit, but they eventually turned our economy around. The $2 billion surplus we saw just last year resulted from the tough choices made a few years back. Governor Pawlenty has made it crystal clear that any attempts to raise state taxes in order to balance the budget will be met with a veto. That’s good news for the taxpayers, as many are already struggling to pay their mortgages or to pay for the rising prices on food and gasoline. Taking more out of their wallets in order to expand state government would send an awful message to those trying to make ends meet. With that option off the table, lawmakers will once again need to tighten their belts. The legislature will need to prioritize where we spend your tax dollars, and those that aren’t deemed most needy will likely receive reduced spending. The process won’t be enjoyable, but it’s also not unprecedented.
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