It's Day Three of the Minnesota government shutdown and the stories of woe and hardship are already pouring in; Fourth of July plans foiled by state park closures, families unable to visit their loved ones in prison, and zoo trips called off. It seems the state is somewhat confused itself about what exactly shutting down entails, as the New York Times reports. Taxes will still be collected but refunds won't be issued, the zoo is closed but a concert series at the zoo is good to go, and driver's licenses can be renewed but not newly issued. These mix-ups are the stuff of political satire, but the government shutdown does mean real pain for many Minnesotans.

While the courts, the police, prisons, and Medicaid will roll right along, over 40 boards and agencies will close, meaning that 22,000 state works won't collect a paycheck until the legislature resolves its budget impasse. These cuts will hurt, but does that make them wrong? The shutdown of all "non-essential" services in the state is an opportunity to reflect on what the core roles of government are. If these services are truly not essential, then why are taxpayers on the hook for them in the first place?

Behind the headlines, the political battles, and the cancelled camping trips lies the story of a state budget gone horribly wrong.  Minnesota's current situation is no accident and it was not entirely unexpected.  Moody's Investor Service has been sending up red flags for over a year.  State Budget Solutions often reports on states avoiding tough decisions and kicking the can down the road, and State Budget Solutions has repeatedly warned that the budget games will eventually catch up with the states playin them. Minnesota is proof positive that legislators cannot ignore fiscal realities and rely on one-time budget fixes forever.

Though now-presidential candidate Tim Pawlenty likes to brag of balanced budgets from his days as governor of Minnesota, despite his efforts to blame Democrats, his accounting games helped set the stage for today's drama.  According to the Wall Street Journal, Pawlenty's repertoire of tricks included, "accelerated tax collections, delayed bill payments and eliminating the rate of inflation from spending forecasts while including it in revenue forecasts. The state also eliminated $1.7 billion of education-funding obligations from its last two-year budget by shifting them into future years." These tactics probably seemed like good ideas at the time (they almost always do), but they merely left today's lawmakers with an even bigger mess.

Current Governor Mark Dayton, with his own ambitious plans to increase spending, is hardly innocent. Democrats and Republicans started this year with a $5 billion shortfall which they managed to whittle down to $1.4 billion before reaching an impasse. Democrats wanted to close the remaining gap with a millionaires tax and now lay the blame for the shutdown at the feet of Republicans who refused to support the plan. Before indicting Republicans for "protecting the millionaires," state Democrats should read the Freedom Foundation of Minnesota's research on the massive migration Minnesota already faces due to high taxes on the wealthy. State Budget Solutions has also examined how higher taxes drive high earners away.

In any case, seeking new sources of revenue in the middle of multi-year structural deficit is treating the symptom, not the disease. Year after year of budget shortfalls, multiple government shutdowns (this isn't the first time and is in fact the second time in six years Minnesota has been in this position), and the 22,000 state workers providing "non-essential" services are all a testament to the fact that state government in Minnesota is bloated. There's no time like the present to re-evaluate what the priorities of government are and where the state has reached too far. It's time to downsize. Nothing about trimming services and jobs is fun, but that doesn't make it any less necessary.

Comment(s)

When are we going to become responsible adults? Individuals have borrowed beyond what they could possibly repay and lost their homes. Our President and Congress have borrowed us into a debt hole so deep we may never recover from it and still be a democracy. Does our governer think that is an example to follow? These politicians are just spending this money that they don't have to buy votes for themselves. Meanwhile they will drive away they people who have the money to invest in businesses that can create jobs for our unemployed here in our state, thereby necessitating more giveaways funded by our government that will be paid for by taxes on the rest of us. It really isn't rocket science, it is just common sense. They just don't have any common sense.

posted by : Carol
Thursday, July 7, 2011 at 10:54 AM  | Permalink

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