The Pawlenty Poverty
Posted by Phoenix Woman on March 1, 2008
MN2020 speaks, you listen:
Governor Pawlenty has shown a fondness for solving the state’s budget problems by cutting aid to local governments. However, the state’s ability to solve its budget problems on the backs of local governments and local property taxpayers is reaching its limits. As demonstrated in a recent Minnesota 2020 report, the average homestead property tax in Minnesota has shot up by over 70 percent over the last six years. Even after adjusting for inflation, the increase is nearly 30 percent. Over the same period, real per capita local government revenue has declined by nine percent. Minnesotans are not likely to sit still for more property tax increases combined with more cuts to infrastructure and local services.
Another favored approach for balancing the state budget is to shift the cost of state services on to local governments. For example, since 2004 the state has shifted responsibility for incarcerating short-term felony offenders to counties and mandated that counties pay ten percent of medical assistance costs for nursing homes stays in excess of 90 days for people under age 65. State cost shifting has the same net effect as aid cuts: higher property taxes and less revenue to pay for other local services.
Another option for balancing the state budget is to shift a portion of state aid payments to school districts into the next fiscal biennium. This accounting maneuver leads to additional school costs in the form of short-term borrowing, but it also provides the state with a one-time shot of revenue within the current biennium.
The problem with aid shifts and other accounting gimmicks is that they do not solve the state’s budget predicament, but simply shift the problem into the future. The trouble with this approach is that the future already looks even worse than the present.
Based on the February forecast, the official state structural budget deficit for the upcoming 2010-11 biennium is $1.1 billion, which is 3.0 percent of state general fund spending. However, the official forecast of the structural deficit is built upon the fiction that-while state revenues increase with inflation-state spending does not.
If we adjust the spending forecast for inflation as measured by the Consumer Price Index, the structural deficit doubles from $1.1 billion to $2.1 billion, which is 5.7 percent of state general fund spending.
4 Responses to “The Pawlenty Poverty”
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shrimplate said
It doesn’t make any sense for those of us on the left to reach across the aisle because conservatism; at least in its current mutation, is dead.
It doesn’t work.
Unfortunately few pols have the courage to say that out loud, so instead we hear the rally cry of “change.”
Charles II said
Even that correction is probably not adequate.
One has to correct for population, which is increasing in most states. For medical issues such as Medicaid, inflation runs at double the CPI. And then there are demographic issues. For example, school costs should decrease if the school age population is decreasing, while elder care costs may increase. Prison costs increase as we incarcerate ever more people.
Finally, there are event-driven costs. If, just to pick something out of the air, you have a major bridge disaster, you probably need to be spending more on road safety.
But of course Minnesota doesn’t have any of these problems, right?
Phoenix Woman said
We’re going to get the road-safety thing fixed, but only over the strenuous objections of the Republican Party. Minnesota’s state lege just overrode Pawlenty’s veto on the gas-tax hike, and the six Republicans who joined the Democrats in pushing the override are being all but kicked out of the Capitol by rabid-dog psychopathic Republicans.
centralmnusa said
Starve the beast and class warfare are winning out and to ignore that the greedy will continue to use the Christian right is folly.