I had to laugh, albeit politely, when I read Jeff Rosenberg’s post talking about how the MNGOP is between a rock and a hard place on the budget. Here’s the part that amused me most:

Later today, the November budget forecast will be released, and it will show that Minnesota has a massive budget deficit, at least $5 billion, and in all probability over $6 billion, not even counting inflation. This is going to be a serious problem for the Republican-controlled legislature. It will be interesting to see how they decide to deal with it.

That’s amusing to me, first, because what’s being called a $5,000,000,000 deficit is based on last biennium’s budget tails, which were wildly oversized vs. the projected revenue. According to the figure from the campaign trail, Minnesota is projected to take in almost $33,000,000,000 compared with $30,700,000,000 for the current biennium.

When omnibus spending bills are put together, the spreadsheet contains the amount that will be spent for that biennium and the amount that they’d like to spend in the next biennium. The second biennium request is called a budget tail. It’s what the MMB people are required to use for their budget projections. It isn’t something that must be spent.

It’s rare that they spend what the tails call for. In fact, the legislature can just as easily choose to spend significantly less. In fact, I suspect that’s what will happen, partially because Republicans have a number of reforms that will save significant amounts of money, starting with King Banaian’s reform to ZBB and Steve Gottwalt’s Healthy Minnesota Plan.

Those 2 reforms will save Minnesota taxpayers hundreds of millions of dollars this biennium.

That’s before talking about what size government should be. When Gov. Pawlenty signed the omnibus spending bills of 2007, the general fund budget called for approximately $35,000,000,000. What Sen. Dayton and the DFL and their allies in the Sorosphere are advocating for is the state general fund budget should be almost $40,000,000,000.

Who in their right mind thinks that the state general fund budget should increase by 20+ percent for the 2012-13 biennium over what’s being spent this biennium?

I suspect that DFL legislators and progressive pundits like Mr. Rosenberg will complain that it isn’t possible to save that much money through reforms and through setting responsible priorities. The MNGOP is anxious to prove them wrong.

The other thing that’s laughable is the part about the forecast not including inflation. Jeff’s right; it doesn’t. There’s a good reason for that: government shouldn’t get an autopilot raise. The only reason why it should get a ‘raise’ is because it fits our priorities, that the increase is essential to achieve those priorities and because we have the money to pay for that raise. PERIOD.

They face a difficult juggling act indeed. Just consider:

1.The Republicans must balance the budget, or they’ll rightfully be blamed for shutting down the government.
2.Their conservative base will not stand for any new taxes.
3.Few Minnesotans will tolerate $6 billion in budget cuts.

Republicans will balance the budget. During that time, they’ll be forced to make tough, adult decisions, something that the DFL appears unwilling to do. The DFL’s approach appears to be to raise taxes on Minnesota’s job creators, then couple that with some spending cuts and a bucketload of federal money.

Here’s a look at some of the line items in the current budget:

Here are the major factors driving the $8.3 billion in spending growth for the next biennium:

Replacing federal stimulus money: -$2.3 billion
School shifts: -$1.9 billion
School shift buyback: -$1.4 billion
One-time reductions: -$660 million
Government program growth: -$2 billion

Rather than setting intelligent priorities, the DFL chose to increase taxes and use one-time federal bailout money. That can’t continue. Steve Gottwalt gets it:

What we really need is jobs and a strong economic recovery. That will only happen as the private sector businesses that create jobs and wealth are able to get back on their feet. That means we must help make Minnesota a more business and jobs-friendly state. The businesses we need to create those jobs have told us loud and clear: “Get out of our wallets and off our backs, and watch what we can do!”

To be responsible, we must make difficult decisions in the coming legislative session. As chairman of the House Health and Human Services Reform Committee, I am dedicated to enacting real reforms and sustainable solutions, instead of finding reasons to avoid necessary changes.

History shows tax increases only result in more spending. Mark Dayton’s “tax-the-wealthy” approach to budget balancing might sound good to those who don’t consider themselves wealthy, but it would kill jobs and facilitate further, irresponsible state spending increases. Even if we adopted Mr. Dayton’s plan, it falls billions short of balancing our budget.

Let’s remember that Sen. Dayton’s second stab at eliminating the deficit fell $1,200,000,000 short:

Democrat Mark Dayton’s second stab at a plan to resolve Minnesota’s projected budget deficit leaves him about $1 billion shy of a complete fix.

The former U.S. senator provided new details Tuesday that calls for $3.6 billion in new state revenue, mostly in the former of increased taxes on high-end earners. His plan relies on profits from a yet-to-be-authorized state-owned casino at the Mall of America or Minneapolis-St. Paul airport.

Dayton’s proposal outlines $1.2 billion in spending cuts.

I said then what I’ll repeat now: that Sen. Dayton’s plan is long on class warfare, that it isn’t about growing the economic pie and is based mostly on fairness. That isn’t a great economic message to fight for. In fact, that’s why I suspect few DFL legislators will fight that vigorously for his plan.

Senate Minority Leader-in-waiting Tom Bakk has already said Dayton’s plan isn’t viable:

“[Tom] Bakk, the chairman of the Senate Tax Committee, says Minnesota can’t realistically tax the rich enough to erase the state’s projected $5.4 billion deficit in the next biennium and can’t afford to pump a boatload of new money into schools when the state is awash in red ink… The Revenue Department’s [Paul] Wilson told Minnesota Public Radio that Dayton’s proposal would require a 40 percent income tax increase on those top earners, raising their rate from 7.85 percent to around 13 percent. That would be by far the highest income tax rate in the nation… Bakk called Dayton’s plan unrealistic… Bakk said he isn’t trying to pick a fight with… Dayton. But he said all the candidates should stop suggesting easy but out-of-reach solutions to the state’s budget problems. He said it’s going to be ‘really tough medicine’ to take. ‘But we should tell them the truth.’” (Bill Salisbury, “Tax the Rich? Is it that simple?” Pioneer Press, December 12, 2009)

The numbers haven’t changed, at least that much. The reality is that the DFL is fighting a difficult fight in the sense that their first arrow out of their economic quiver is to raise taxes, which isn’t where Minnesotans are at right now.

If the DFL sides with Sen. Dayton, they’re the ones who will be in a difficult fight in 2012. Yes, I agree that it being a presidential election changes the dynamics of their races but let’s not think people who support massive tax increases will win over many independents.

There’s a reason why people elected Republicans to majority party status. It can be argued that part of voters’ disgust was the result of the federal government’s overspending and bailouts, including the Obamacare bill. Expecting things to be significantly better because President Obama is on the ballot isn’t paying attention.

Frankly, I think it’s quite possible, even likely, that there will be lots of people who vote for President Obama, then vote for the conservative legislator on the ballot.

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