It's often said that tough times tell you more about someone's character than good times ever could. I think the same is true when you're talking about the character of a state.
It's no secret that we're going through a rough patch as a state. Our economy has been struggling, tax revenues are down and we're facing serious challenges in health care and education.
On top of this -- and in part because of it -- our state is facing a significant budget deficit -- this time in the amount of $935 million. Last week, Democrats in the Minnesota House offered our proposal to balance the budget. As we put the proposal together, we tried to keep a few simple principles in mind that we think reflect the true character of our state.
First, our budget fix had to be responsible. That meant no budget sleight-of-hand or accounting gimmicks and no more shifting of state costs onto local governments and schools. One of the reasons we've bounced from one budget crisis to the next over the past six years is too much of this was done in previous budgets. Those budget fixes relied almost exclusively on across-the-board cuts, costs shifts and crossed fingers. We felt it was important to end that cycle.
Second, the fix had to be balanced. That meant a reasonable combination of budget reductions, responsible use of reserve funds, and increased revenues. We think we accomplished that.
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Under our budget plan, there are no general taxes increases, we keep our commitments to schools, health care and college students and there is an appropriate use of rainy day funds to help address the budget deficit.
There have been objections to our use of the rainy day funds to balance the budget, but we need to acknowledge that it's raining today. Our plan uses the state's cash flow account and some of the budget reserve, both of which were created to help us deal with economic downturns. We also made sure that a cushion remains in case the economy worsens.
We believe this a better approach than the one the governor is advocating, which is to raid a fund that was created to provide access to affordable health care. At time when affordable health care is slipping out of reach for so many Minnesotans, that's only going to cost us more in the long run.
Finally -- and most importantly -- the plan needed to reflect the priorities of the state. One of the reasons our economy is lagging behind the rest of the country is because past budgets have sacrificed too many of our priorities on the altar of political tax pledges.
The best ways to attract businesses, create jobs and get our economy moving again is to make sure our kids get the best education possible, keep post-secondary education and training affordable and reform health care.
Our plan doesn't simply protect our schools, but reprioritizes resources and invests the equivalent of an additional 1 percent in the funding formula or approximately $51 per pupil statewide. We also minimized the governor's proposed cuts to higher education, which should allow our universities to keep tuition affordable.
Our plan allows us to continue moving forward on health care reform and eliminates the governor's proposed cuts to nursing homes and the disabled. It also provides a 2 percent cost-of-living adjustments to the nursing home reimbursement rate, which will ensure that our seniors will continue to get the care they deserve.
Our plan also protects the investment we made earlier in the session in our transportation system and will allow us to address our crumbling infrastructure with a responsible and job-creating bonding bill. Those two measures alone are expected to create over 40,000 good-paying jobs in Minnesota in the first year alone.
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There are significant cuts, as well. Our proposal includes budget reductions to state agencies of approximately 3 percent and includes the same reduction to the Legislature's budget.
Balancing the budget isn't going to be easy, but one of the great things about Minnesota is the willingness of our citizens to work together to meet challenges head on. We have an opportunity this session to put the state back on solid financial footing and at the same time invest in a better future.
Let's make the most of it.
Tony Sertich, DFL-Chisholm, is a member of the Minnesota House and is majority leader.
