The parties have weighed in. The governor and the state’s two major parties now all have their proposals for eliminating the state’s projected $4.23 billion deficit on the table. To avoid a special summer legislative session, a final state budget that eliminates the deficit will need to be passed within the next six weeks. To eliminate the shortfall as mandated by our state’s constitution, there are three main options: reduce state spending, raise state tax and fee rates, or find an appropriate mixture of both. Given that the Republican Party controls both the governor’s mansion and the House of Representatives, the final budget recipe will have a heavy dose of GOP cooking. However, to do all of the state’s people justice over the next few years and further into the future, the final budget plan needs more than just a dash of the DFL’s deficit-elimination plans.
Minnesota has incurred a budget deficit because it has employed a typical “boom-time” budget strategy during the last five years. It has severely reduced tax rates, including a much ballyhooed change in the state’s property tax structure and imposed even more funding responsibility on itself.
Gov. Tim Pawlenty’s budget plan would reverse this recent five-year trajectory. Pawlenty proposes dramatically curtailing increases in state spending and holding tax and fee rates at current levels. Under his plan, much of the burden would fall on the people and institutions most dependent on robust state spending – the poor, the elderly, local government and higher education. Those least dependent on state money, typically high-income earners, would be least affected. While the homeless shelters might close, life in Eagan would remain largely the same.
The Minnesota GOP legislative contingent, led by House Speaker Steve Sviggum, generally supports Pawlenty’s plan. However, the GOP legislative cadre would like to restore some of Pawlenty’s proposed cuts in elderly and nursing home care and medical assistance. To compensate, the GOP budget plan would, among other things, cut $60 million in projected child care subsidy spending for lower-income families.
DFLers have a different idea. The DFL plan would partially eliminate the deficit by raising an additional $1 billion through tax rate increases on the richest 5 percent of Minnesotans and cigarette smokers. The DFL plan would also cut current state spending by more than $1.2 billion. Unlike the Republican plans, much of current state spending on the poor, elderly and young – Minnesota’s most vulnerable – would be maintained by the extra tax revenues.
The Pawlenty and GOP budget plans suggest it is fiscally prudent – even right and fair – to ask the poorest, sickest and youngest members of Minnesota to bear the brunt of economic hardship. Using the family analogy Pawlenty often resorts to for explaining his budget plan reasoning, the Pawlenty-GOP budget plan strips poor and helpless Johnny and Susie of their allowances while mom and dad continue to spend on trips to Club Med and fine wine.
Yes, a budget deficit as large as $4.23 billion requires significant cuts in state spending. The DFL budget plan acknowledges this reality. It also, unlike the Pawlenty-GOP budget plan, recognizes the justice in asking all Minnesotans, including those fortunate enough not to have to rely heavily on state resources for well-being, to pay their fair share to solve the state’s fiscal mess.
Some Republicans deride the DFL plan as “class warfare.” That criticism should make Senate DFLers proud – at least someone is willing to fight for the least defended classes of Minnesotans. For the sake of all Minnesotans, especially the most vulnerable among us, the Legislature must pass a final budget bill that recognizes the needs of all Minnesotans and the fairness of equitably sharing the burdens of economic downturns.
