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Pioneer Editorial: Long-term budget fix first priority

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opinion Bemidji, 56619
Bemidji Minnesota P.O. Box 455 56619

The state's latest budget forecast, released Thursday, shows the budget deficit slipping even further into the hole than last forecast last February -- now standing at $6.2 billion or nearly $600 million more than the $5.6 billion forecasted earlier.

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The Legislature will have its work cut out for it when it convenes next month to figure out the next two-year state budget. But at least the good news is the current biennium ending June 30 will end with a surplus -- $399 million -- so there won't have to be any emergency budget measures, such as unallotment, needed yet this month to assure a balanced budget at mid-year. That surplus, however, should be allowed to roll over into the next biennium as the start of a budget reserve -- as the current budget reserve was near-depleted in order to seek a balanced budget.

The $6.2 billion budget deficit amounts to 16 percent of a $38.5 billion two-year state budget -- and Republicans and Democrats are already at opposite ends of the spectrum. Democrats, including governor-to-be Mark Dayton, are calling for additional revenues by taxing the wealthy more. Republicans are talking about cutting spending to match the expected $1.5 billion in expected new revenues, and proposing cutting corporate taxes to help spur the economy.

An oft-repeated line through the campaign bears repeating again: You can't cut your way out of this deficit, nor can you tax your way out of it. An even deeper deficit now mandates a balance between cuts and taxing.

Projected spending at a 27.5 percent growth, or $8.3 billion, can't be allowed to continue but where do the numbers come from? The state has borrowed $2.3 billion from school districts that must be repaid or else local property taxpayers will through higher taxes, and $2.3 billion in federal stimulus spending was only one-time funding.

Not improving K-12 funding will mean less state funding per student, as student populations grow. And, with baby boomers aging, the demand for state-subsidized health care and nursing care for the elderly is climbing. The demographics are not the same; freezing funding will mean fewer services as service demand increases.

We do have a structural budget problem, and lawmakers need to look to the future to solve the current mess. Delaying payments or borrowing won't solve the long-term problem. Neither will deep spending cuts, as that will just push the problem to future generations as they deal with a Minnesota quality of life that will continue to diminish.

Minnesota voters may have sent a signal in the recent election for a smaller government, but we don't think that they meant that it comes with a lesser quality of life for those most vulnerable.

But it is clear that voters want something done to correct the long-term problem other than stalemate.

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