I am asking area residents to provide some input regarding proposals to eliminate our state's $6.4 billion deficit. Please put any personal motives aside and offer objective thoughts as to what should be done to not only erase our deficit, but to make us strong for decades to come.
Here is an overview of separate plans to balance the budget issued by Gov. Tim Pawlenty and the majority parties in the House and Senate.
Note: Pawlenty and the House factor in federal stimulus money and the Senate may also, but did not include that funding in its proposal.
The governor's spending plan comes in at $32.4 billion over the next biennium, which begins July 1. It reflects an approximately 4-percent decrease from the $33.9 billion in General Fund expenditures in the current budget. Pawlenty said that his proposal relies on no new taxes, but retains use of $1 billion in one-time funds gained through the sale of "tobacco appropriation bonds," that would essentially bond for half of 20 years' worth of future revenues from the state's decade-old tobacco settlement.
The House majority's spending plan comes in at $36 billion over the next biennium, a 5-percent spending increase from the current budget.
This budget calls for $4.4 billion in new taxes over the next four years. The House speaker said the House Taxes Committee would be coming forward with details on what taxes would be increased, but that information currently is not available.
The Senate plan is a budget of $31.5 billion over the next biennium, with a spending cut of 7 percent across the board the next four years and $2 billion in new taxes. The Senate indicated it could restore some budget cuts by using federal stimulus money, but details have not been provided.
Pawlenty's plan is the only one that increases education spending (by about 2 percent). It also includes a $1.3 billion shift, or a "delay in payment" in state funding to schools. The House majority keeps education funding level and has a $1.77 billion shift, while the Senate cuts education by 7 percent.
The decision we need to make is this: Are we OK with raising taxes, accepting the fact that tax increases we pass to get us through this rough patch will not go away once the economy recovers? Or are we better off borrowing now and paying off the debt over the next two years with the hopes of our economy will turn around?
Strong arguments will be made on both sides of the issue. The Legislature is scheduled to adjourn May 18, but there is no guarantee our budget will be balanced by then (as mandated by the Constitution).
Legislators often are criticized for not getting done on time and we could be called back to St. Paul for a special session to get our budget resolved. But I'd rather dig in and fight for the people I represent instead of agreeing to something we'll regret just to beat the calendar.
Your input will be very helpful to me as we look at these budget issues during the coming weeks.
Larry Howes, R-Walker, is a member of the Minnesota House.