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Legislative News and Views - Rep. Joe McDonald (R)

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First step in plan to erase state shortfall unveiled

Thursday, January 20, 2011
By Rep. Joe McDonald The concept is simple, yet it seems so hard for government to grasp: When you run out of money, quit spending. One way or another, we’ve all been impacted by our recession the last few years. Most of us have made adjustments in our own budgets to make ends meet at home or with our businesses. But government always seems to be the last to react to economic changes and our state kept on spending as if it had been inoculated from the recession bug. Our commitments to spending rose by nearly 25 percent – to almost $39 billion – from the current two-year budget cycle to the next. So here we are today, staring a $6.2 billion shortfall in the eyes. Most of our quick budget fixes like one-time cuts, delayed payments, reserve-fund spending and federal stimulus funding have been exhausted to erase prior shortfalls. That leaves us with difficult choices this session, but we’ve already started formulating a solution by introducing a bill which eliminates $1 billion of our shortfall. This first phase includes a continuation of “unallotments” which received bipartisan approval at the end of the 2010 session. It reduces the deficit by removing $840 million of automatic increases set for next year, reduces funding for the Legislature and constitutional offices, sets Local Government Aid at current levels while leaving the current formula in place and permanently eliminates the program which uses tax dollars to subsidize political campaigns. A key component gives the Minnesota Management and Budget Commissioner the directive to reduce state agency spending by $200 million. The idea is to bring an end to the practice of government offices frivolously spending what’s left at the end of a budget cycle so they can show a $0 balance and “validate” their level of funding for the future. That’s the epitome of government waste and we can’t afford to continue rewarding counterproductive budget practices like this. The silver lining in our budget struggles is we do have an opportunity to take a step back and re-think how our state functions. We have $32 billion to work with in the upcoming cycle, a slight increase over the current budget. That is enough to support our priorities like K-12 education, public safety and care for our vulnerable citizens (including children, the elderly, the disabled and the poorest of the poor). But the state has made spending commitments to many additional areas and that will lead to some real challenges. Some of the budget decisions we’ll make this session will be difficult, but they’re also necessary. I am confident our new leadership in the Legislature will help us get on track. If we don't all chip in and be part of the solution by embracing responsible changes, it’s going to start feeling a lot like California around here. And, no, I’m not talking about the weather. —30— Rep. McDonald can be reached at the Capitol by calling 651-296-4336. He is also available by email at rep.joe.mcdonald@house.mn. His office is located at 523 State Office Building, 100 Rev. Dr. Martin Luther King, Jr. Blvd., St. Paul, MN 55155.
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