There's no way to avoid the grim economic news that continues to hammer us. Echoing weak national and global economic trends, state revenues continue to drop sharply -- more than $1.2 billion just since November. That's caused Minnesota's budget deficit to swell to an astounding $6.4 billion for the next biennium, a larger deficit than any in our state's history.
Thanks to President Obama and Congress, federal stimulus money directed to Minnesota will cushion some of the blow. But we're still left to resolve a $4.6 billion budget shortfall for the coming biennium and an even larger deficit for the two years after that.
Our state economist attributes the steep decline to mounting job losses. In 2008, Minnesota lost more than 70,000 jobs -- more than to the combined population of Hubbard and Beltrami counties. In January alone, Minnesota lost 20,000 jobs. Put that in context of a normal year in which Minnesota typically gains 40,000 jobs a year. Worse still, we're projected to lose 120,000 jobs by the time things start to turn around, roughly equal to the population of Hubbard, Beltrami, Cass, Koochiching and Roseau counties.
As a result of escalating unemployment and declines in other sources state revenue, we're left with a budget deficit unlike any in recent memory, and far fewer existing resources available to solve it.
The choices we make will affect Minnesotans for years to come.
The state budget is far more than just numbers -- it affects real people in real ways. A letter I received from a constituent illustrates the challenge as she makes the case for sparing long-term care from funding cuts: "... It is so important (to preserve funding) ... because our elder(s) need the staff to take care of them. To provide meals and to feed them. To assist medication and to help them with their daily care and activities. Rooms need to be kept clean ..."
She's right. Cuts to long-term care and nursing homes not only jeopardize the quality care we want and expect for our aging seniors, they also would throw more people out of work. And that's the dilemma. If we spare one area, we'll have to dig deeper into others, whether our schools, our colleges, or our cities and counties.
It just isn't possible to get out of this hole with quick fixes or short-term shifts. We've already seen that cuts alone, like the ones imposed during Minnesota's last budget deficit, cannot protect the future or guarantee economic success. More likely, they'll cost us more in the short and the long run.
Our budget reserves are tapped, the "no-new taxes" policy has failed to deliver its promise of job growth and economic strength, local and state governments have been forced to raise property taxes while cutting essential services, and steady disinvestment in Minnesota's people and places has jeopardized our celebrated quality of life. Core elements of state government are at risk of being unable to function adequately including our court system, public schools, state colleges and universities, and our health care system, including nursing homes.
The situation is serious -- but it's not without hope. Much will depend on how we meet the challenges we face. We need to employ hard scrutiny of the ways we fund and deliver basic government services and we constantly need to ask -- as we've been doing all along -- what we're willing to give up and what we're willing to do to preserve the things we value. And when asked to sacrifice, Minnesotans expect that we'll all share it fairly.
The fairest way to solve a problem this big is by balancing the budget with a combination of spending cuts, new revenue and significant reform. We can't ignore opportunities to create new solutions for a new time. For example, Minnesota is one of five states poised to move quickly to create new green jobs with the federal stimulus money. A bill moving through the Legislature now would create a Green Enterprise Authority, a one-stop shop of resources for anyone thinking of opening a green business in Minnesota. That program would make it easier for new green businesses to get started, create new high-paying jobs, and save money by eliminating administrative duplication of service.
I've said before that Minnesotans are no strangers to difficult challenges. But I firmly believe we're up to the task.
Doing what needs to be done now, fairly and with an eye to the future will allow us to emerge stronger and more prosperous than ever.
Brita Sailer, DFL-Park Rapids, is a member of the Minnesota House.