Following two weeks of negotiations, House and Senate leadership and Governor Pawlenty came up with a “global agreement” to solve the state’s $935 million budget deficit, provide property tax relief to Minnesotans, provide tax relief to Minnesota veterans, and increase funding to our nursing homes.
It’s worth noting that, as predicted, this budget shortfall could be eliminated without raising taxes. This will happen because our leaders agreed to make $355 million in spending cuts and utilize $500 million from the state’s rainy day fund. Acquiring $100 million by closing some loopholes in Minnesota’s corporate tax system completed the process.
It’s also worth noting that even with these deductions, the price of Minnesota government will still grow by 9.8% over two years, as compared to 10.2% if no cuts had been made.
The compromise also means Minnesotans will see some real property tax relief. $25 million for direct property tax relief, $65 million for Local Government Aid, and caps that limit local levies to a maximum 3.9 % increase should be welcome news to our home and property owners.
Nursing homes were not only held harmless during the negotiations - they even received a raise! They will see a two percent cost-of-living adjustment as a result of the agreement, which again was accomplished without raising taxes.
In the K-12 area, we were able to protect Q-Comp - an education reform program that rewards teachers for success and excellence. This is especially important as at least two schools from District 28B, Kenyon and Winona, would like to take part in the program.
But it’s important to remember that this was a compromise. While there are many provisions that are good in the bill, there are also a few clunkers. For example, the Central Corridor light rail train bonding project between Minneapolis and St. Paul was included.
But with any compromise, you have to weigh the good with the bad. In the end, the good outweighed the bad.
Lawmakers exercised cooperation and compromise and successfully got the job done. And at least from a House Republican perspective, we were able to achieve this without compromising our values - lower taxes, smaller government, and more freedoms for all.