Yesterday, the SC Times published Wadena Mayor Wayne Wolden’s LTE in which Mayor Wolden claimed that revenues, not spending, had caused the current deficit. This morning, I submitted a Write Now editorial arguing against Mayor Wolden’s editorial. Here’s what Mayor Wolden said that got me fired up:
Tanking housing and credit markets and rising fuel costs have pulled at all of our budget strings, local and state governmentsâ€™ and the publicâ€™s alike. But it is the stateâ€™s poor fiscal practices that have caused its budget to completely unravel.
Shrinking revenues and drained reserves have destabilized Minnesotaâ€™s economy and have failed to safeguard the state from financial crises, such as the one we are facing now.
Even so, the governor and many at the Legislature will argue that the state has a spending problem, which is nothing more than a clever side-step around the real problem: our stateâ€™s broken revenue system.
This Saturday, the Lady Logician wrote a prebuttal to the coming onslaught of LTE’s stating that we have a “broken revenue system.” The centerpiece of the Lady Logician’s post is supplied by Rep. Mark Buesgens. Here’s what Rep. Buesgens said:
Our government is in a deep, deep financial hole, and the first step to climbing out of it is to stop digging it even deeper. Spending went up almost 10 percent in the last two years, and 12 percent in the two years before that. In just the last four years, state spending has increased by a whopping $ 6.5 billion dollars. If the Legislature and the Governor could simply agree to go back to the 2005 spending level, we would be looking at a $1.3 billion dollar surplus.
Governmentâ€™s role in helping our state achieve more prosperous times is to focus on taking actions that preserve liberty, ensure public safety and develop the necessary infrastructure for a vibrant economy.
The state’s budget deficit is $5.2 billion, of which $426 million is for this biennium, the other $4.8 BILLION is for the next biennium. Why would any politician think that they could increase spending by double digit percentages in back-to-back bienniums, especially when we’re heading into a slowing economy? In fact, we’re now officially in a full blown recession.
If this information upsets you, then you’ll be livid when you read this from Rep. Steve Gottwalt’s latest E-Letter:
I also support Gov. Tim Pawlentyâ€™s call to reorganize state government for greater efficiencies, and rein in government spending that has grown by 140 percent since 1992.
That’s appalling, especially considering we’ve had 8 budget sessions since 1992. That’s an average of 18 percent growth per biennium.
How many people, outside of Mayor Wolden, think that we don’t have a spendaholic legislature? During six of those budget sessions, we had liberals like Arne Carlson and Jesse Ventura signing the budget bills. Is it any wonder?
How can Mayor Wolden seriously say that we’ve got a revenue problem? I suspect that mayors got addicted to the huge LGA payments they got during those supposedly golden years of budgeting. I suspect that they spent like the gravy train wouldn’t stop. They thought wrong.
Mayor Wolden also insults us with this statement:
Facing a $4.5 billion budget deficit in 2003, the state chose to cut critical aid programs, such as Local Government Aid, a program that helps cities with lower tax bases provide basic services, to close the budget gap.
If LGA is “a program that helps cities with lower tax bases provide basic services”, then why do St. Paul and Minneapolis get big LGA payments? LGA wasn’t intended to be used for not making difficult spending decisions. Unfortunately, it’s apparent that that’s what cities did with the LGA.
I’d point out that LGA’s original intent was to help small towns like Rockville, St. Augusta and Delano pay for big ticket items like fire halls, police department buildings and fire trucks. The logic behind it was that a fire truck cost just as much in Rockville as in St. Paul, the difference being that St. Paul had a huge tax base to pay for it with. The cost per capita of a fire truck is alot higher in Rockville or St. Augusta than it is in St. Paul.
Nonetheless, Mayor Wolden insists that the broken revenue system be ‘fixed’:
Today, property taxpayers are being stretched to their limits, and cities are struggling to provide needed services to residents, such as transportation infrastructure, public safety and the everyday services often taken for granted, such as clean drinking water, solid waste disposal and clean streets.
Even in tough economic times, these are the basic services that simply canâ€™t be cut.
City officials have tightened budgets, eliminated jobs and cut what they can to lighten the tax burden on their residents, but ultimately this wonâ€™t be enough, just as narrowing the stateâ€™s $4.8 billion deficit down to a â€œspending problemâ€ wonâ€™t be enough to prevent a repeat budget crisis like this in the future.
I know that reprioritize is a 4-letter word with the DFL but it’s the right perscription for the budget deficit. Despite huge LGA payments, Minneapolis is still drowning in red ink:
In the face of a hurting economy and a projected $38 million in new costs for employee pensions over the next five years, the City Council proposed to increase Mayor R.T. Rybakâ€™s suggested 6.86 percent property tax levy for 2009 to 8 percent, the ceiling amount set in 2007.
Rybak, who was at the Friday meeting, said he hoped to keep property taxes below 8 percent in his 2009 budget. However, recent months have made it clear that the city has issues with its pension funds, he said. â€œI canâ€™t tell you how disappointed I am,â€ Rybak said. â€œBut I do think the most responsible thing to do is to apply this immediately.â€
At the time, didn’t it dawn on Rybak that pensions might become his city’s ruination? Why didn’t he think that far ahead? Just like a liberal, though, his first instinct is to raise taxes. I don’t see proof that Rybak did any oversight into the things Minneapolis was already spending money on. I don’t see proof that he questioned any expenditures. I don’t see proof that he was interested in exercising fiscal restraint at a time when it was clearly needed.
Though I don’t have proof of this, I suspect Mayor Rybak simply expected the government to bail him out. It’s time we stopped paying for additional LGA. In fact, it’s time to re-examine which cities get LGA. It’s time we reformed our LGA system. In fact, it’s time we reformed state government. That’s what Rep. Laura Brod and State Sen. Geoff Michel have in mind:
With Minnesota officials poised to announce a multibillion-dollar budget deficit today, two legislators on Wednesday proposed leasing the Minneapolis-St. Paul International Airport and the Minnesota State Lottery to private operators to generate additional money for the state.
Sen. Geoff Michel, R-Edina, and Rep. Laura Brod, R-New Prague, said at a Capitol news conference that with the national recession and a growing state budget shortfall, it’s time to consider bold, innovative ways to run government.
“The deficit will be a big challenge,” Michel said, “but it’s also an opportunity for us as policymakers to get out of the same old, same old and talk about brand-new ways of delivering government services.”
The traditional ways of balancing the budget, increasing taxes and cutting spending, “won’t get the job done,” he said. “We have to think of a third way.”
Brod said Minnesota has fallen behind other states and cities in developing public-private partnerships that can deliver better services while relieving taxpayer burdens.
While lease revenue could be used to reduce the deficit, she and Michel said they would prefer to invest that money in an education endowment that would be used to fund college scholarships and other education initiatives.
Thinking outside the box is precisely what’s needed here and Rep. Brod is one of the best in the political business at that. Unfortunately, the DFL is afraid of thinking outside the box. Their thinking is summed up by Sen. Steve Murphy:
Senate Transportation Committee Chairman Steve Murphy, DFL-Red Wing, warned that privatizing the airport would jeopardize the security of travelers. He said in a statement that he fears a private corporation would try to operate the airport as cheaply as possible instead of focusing on security.
Murphy asked why the state should disrupt one of the best-run and most profitable airports in the country. “Selling off the state’s infrastructure to make a few bucks in a garage sale is not the responsible way to approach a budget deficit,” he said.
Sen. Michel must’ve anticipated the DFL’s answer because he’s got a great answer:
Michel said a state lease would carefully regulate and provide oversight for operating the airport to ensure public safety. He said a private operator would make a profit on concessions and parking ramps.
Sen. Michel should’ve known better than think that the DFL is interested in things like oversight hearings. They’re as interested in conducting oversight as a vampire is interested in wooden stakes.
UPDATE: My Write Now is posted here.