Gov. Dayton said using state reserves to speed payback now would be fiscally irresponsible.

The bitter fight over unions that has swept across the country in the past year is erupting in Minnesota, as legislators begin toiling over a controversial proposal that would alter the nature and diminish the might of organized labor in the state.

A proposal to take $430 million from state emergency fund and cash accounts to make up delayed K-12 aid draws Dayton's scorn.

A new state budget forecast will be released late Wednesday morning and the report could change the dynamics at the State Capitol for the remainder of the legislative session. The forecast comes just as Gov. Mark Dayton nears decision time on several bills wending their way toward his desk.

Bipartisanship aside, tax reform is imminent in a number of states. Since 2000, at least 37 states conducted new tax studies, studying how to better increase revenue elasticity, improve overall fairness, reduce efficiency, and ease administrative and compliance efforts.

State officials announced a $323 million surplus today, but the money was automatically committed to paying the state's debt to public schools and replenishing budget reserves.

Republicans will learn this week how deep in debt their party is - and who their leaders will be. Successors for both former GOP chairman Tony Sutton and former Majority Leader Amy Koch are to be chosen this week.

Consulting firms have promised to find tens of millions of dollars in savings as Governor Dayton and the legislature look to continue to trim costs.

The state budget that passed this summer following the state government shutdown included delaying 40 percent of payments to schools until the next fiscal year, forcing many school district to borrow money.

Minnesota budget officials estimated a surprise $876 million surplus for the rest of the state's two-year budget, but the forecast projected a deficit of $1.3 billion for fiscal years 2014-15.

Some lawmakers and pension officials are pushing to abandon the roughly 8% annual-return assumption set by many public-employee funds, saying the rate is unrealistically high given upheaval in markets around the world and the preceding financial crisis.

Two scholars say that Minnsotans may have to pay another $2,000 per household in taxes, just to make good on promises made to public pensions.

In a pair of rulings that may bolster efforts to roll back public pensions nationwide, judges in Minnesota and Colorado have thrown out lawsuits challenging recent cuts to certain retiree benefits.

The court dismissed a lawsuit challenging pension reform legislation that state lawmakers passed at the end of the 2010 legislative session.

Are Minnesota taxpayers being exposed to significant risks from pension liabilities? Or is Minnesota successfully avoiding the problems other state and local governments are struggling with? What are the current and long-term costs of our public pension decision-making? Are there reforms we can pursue to improve both the financial health of the public pension system and the accountability of pension decision-making to state taxpayers? These are the questions addressed in this report.

If legislatures are not permitted to cut retirement costs now, the argument goes, the ability of the public pension systems to pay future benefits will be jeopardized.

Facing shortfalls, some public pension funds are responding by paring back payouts pledged to retired workers. Earlier this year, pension funds in Colorado and Minnesota curtailed annual cost-of-living increases.

Replacing MinnesotaCare with a state subsidy for individually owned private health plans is one of the key parts of the effort to redesign how the state provides health care to the poor. This can save $100 million on childless adults and up to $600 million if everyone is included.

To keep the state budget in balance over the long term, Minnesota must better manage the spending side of the ledger.  Over the past 40 years, total state expenditures from all funds increased at double-digit rates in all but four biennia.  To control spending, Minnesota must adopt bold new budget tools and processes.

Are Minnesota taxpayers being exposed to significant risks from pension liabilities? Or is Minnesota successfully avoiding the problems other state and local governments are struggling with? What are the current and long-term costs of our public pension decision-making? Are there reforms we can pursue to improve both the financial health of the public pension system and the accountability of pension decision-making to state taxpayers? These are the questions addressed in this report.

States spend nearly $200 billion annually purchasing goods and services-paying for everything from building roads and bridges to buying desks and computers. Conservative estimates suggest that reform of government procurement practices could save 5 to 10 percent of that total spending.

Lawmakers' top priority for this session is erasing the $4.6 billion shortfall forecast for the 2010-11 biennium. In doing so, they must also work to create permanent solutions that not only erase the present shortfall but also avert future shortfalls. Due to certain demographic realities-led by the swelling numbers of baby boomers entering retirement-government spending is projected to outpace tax revenues for the next 25 years. Under these trends, business as usual cannot continue. Consequently, big changes to state programs and possibly the tax code will be necessary.

T his brief report by American Experiment Policy Fellow Peter Nelson, released in conjunction with the start of the 2010 legislative session, outlines several potentially pivotal ideas for improving the way the State of Minnesota establishes spending priorities and develops biennial budgets.

We would all like to live well in our Golden Years, but should the taxpayer be on the hook for 85% of the highest (five) earning years, without regard to how much employees contributed, the financial status of the fund or the fact that retirees (should) have lower expenses than the plans currently assume?

Governments are slowly coming to grips with the problems created by running their pension systems with pie-in-the-sky investment returns. Unfortunately, most still haven't.

Some lawmakers and pension officials are pushing to abandon the roughly 8% annual-return assumption set by many public-employee funds, saying the rate is unrealistically high given upheaval in markets around the world and the preceding financial crisis.

Two scholars say that Minnsotans may have to pay another $2,000 per household in taxes, just to make good on promises made to public pensions.

The court dismissed a lawsuit challenging pension reform legislation that state lawmakers passed at the end of the 2010 legislative session.

In a pair of rulings that may bolster efforts to roll back public pensions nationwide, judges in Minnesota and Colorado have thrown out lawsuits challenging recent cuts to certain retiree benefits.

Pensions are a bi-partisan problem; it will take a bi-partisan investment of serious political capital to change course in Minnesota.

Are Minnesota taxpayers being exposed to significant risks from pension liabilities? Or is Minnesota successfully avoiding the problems other state and local governments are struggling with? What are the current and long-term costs of our public pension decision-making? Are there reforms we can pursue to improve both the financial health of the public pension system and the accountability of pension decision-making to state taxpayers? These are the questions addressed in this report.

If legislatures are not permitted to cut retirement costs now, the argument goes, the ability of the public pension systems to pay future benefits will be jeopardized.

Facing shortfalls, some public pension funds are responding by paring back payouts pledged to retired workers. Earlier this year, pension funds in Colorado and Minnesota curtailed annual cost-of-living increases.

This all boils down to who gets to pick taxpayers' pockets first, public pensioners or municipal bond investors? More people are waking up to the hard reality that when it comes to state and local government, somebody has to lose money over the next few decades. The National Association of Bond Lawyers is worried enough about it to issue "Considerations" for advising clients who think they're getting safe investments.

Despite an organized campaign to stop public pension reform, reality is beginning to break through.  One recent report outlines a possible path to long-term solutions and another details the necessity of states and municipalities finding their own way because federal bailout is impossible.  And Chicago Mayor Rahm Emanuel released a plan that could have been based on both reports.

Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades? That is what will happen in many - maybe all - states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.

Public employees should take their pension money now and run to avoid risk of getting reduced benefits - or nothing - in the future. It's the best deal for them and for taxpayers. A growing chorus of credible voices including the Government Accountability Office, a Federal Reserve bank and now the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government confirm state and local government finances are "spiraling out of control" and even draconian reforms only make it "more likely" that future benefits will paid in full.

Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades? That is what will happen in many - maybe all - states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.

This is what it sounds like when the Federal Reserve Bank screams: "Much has been written about the various headwinds restraining economic activity over the near term. However, our economy also has other headwinds to confront over the medium- to-longer-term. ... the finances of some state and local governments are also under stress and in need of serious adjustments."  - Federal Reserve Bank of Cleveland President Sandra Pianalto

In 2011, the Minnesota government shutdown stalled business, disrupted the lives of citizens and state employees alike, and created a less than favorable impression of government competency. The record-setting nineteen-day closure led lawmakers to vow then that Minnesotans will never experience another government shutdown. Last week, in an effort to follow through with their promise, a Minnesota Senate committee is set to consider a cluster of bills that would make various state functions "shutdown proof."

Some critics also rightfully wonder why Minnesota is contracting private consultants, when the Minneapolis Internal Audit Department (IAD), created in 2009, provides this very function for Minnesota's largest city. An internal auditing watchdog, the IAD evaluates the integrity of financial records and reports, evaluates city departments for risks of fraud, and maximizes efficiency. Yet as the state hires twenty-two outside consultants, the Minneapolis City Council is considering cutting the IAD in half to generate $130,000 in savings.

After the surplus of $876 million comes a projected deficit of $1.3 billion for 2014-15. That's a small deficit, but also a sign that the state is not necessarily on a sustainable path.

We would all like to live well in our Golden Years, but should the taxpayer be on the hook for 85% of the highest (five) earning years, without regard to how much employees contributed, the financial status of the fund or the fact that retirees (should) have lower expenses than the plans currently assume?

Governments are slowly coming to grips with the problems created by running their pension systems with pie-in-the-sky investment returns. Unfortunately, most still haven't.

Maybe when Minnesota deals with yet another deficit, the struggling state will give Reality-Based Budgeting a try and give up on kicking the can down the road one fiscal year at a time.

Not only will agricultural subsidies legislation disproportionately affect the budgets of Heartland states, it also may play a more influential role in the upcoming Presidential election than a cursory count of electoral votes and voting trends indicate. 

Medical hardware just happens to be a Minnesota specialty, so the Affordable Care Act has a extra impact on the state. It so happens that in this case, industry concerns line up with the concerns of a free-market advocate.

After the record-setting nineteen-day closure, lawmakers are vowing to make sure that Minnesotans never experience another government shutdown. That Minnesotans don't have to worry about shutdowns every two years seems ideal, but some lawmakers are speaking out against this type of legislation.

So the education funding bill in Minnesota is now law. It's both good and bad, as you might expect.

Tuesday's special session began at 6pm and continued into the wee hours of the morning. Minnesota lawmakers' last votes came in around 3am, effectively passing five of nine budget bills covering spending for public safety, education, environment and energy, transportation, jobs, and human services. This morning, Governor Mark Dayton is slated to sign the budget bills, ending the 19-day Minnesota shutdown.

Looks like Minnesota didn't just shutdown the government, but also shut off access to information for citizens too.

One of the longest state governments shutdowns in recent US history could end this week, as Minnesota Gov. Mark Dayton reached an agreement with legislative leaders to convene a special legislative session in order to get Minnesota running once more. 

A state that needs to act to promote its long-term fiscal health should periodically review its existing agencies to see if they make sense or should be eliminated.

There's been plenty of tongue-wagging about how a beer shortage may have helped move Minnesota out of its government shutdown (not a done deal yet, by the way). But here's a more important point: Do we really need all the fixtures of the regulatory state?

The phrase “kick the can” has become so used in Minnesota budget discussion as to become a cliche. But it’s true.

Observations on the state budget deal recently reached in Minnesota, which Kim Crockett says "is a political win and it is a big one" for Republicans.

State Budget Solutions is very pleased to see that Minnesota Republican Legislators stuck to their principles and refused to raise taxes even though Governor Dayton shut down state government and demanded a tax increase.

If two Democratic Party stalwarts such as Andrew Cuomo (son of former governor Mario Cuomo) and Jerry Brown (son of former governor Pat Brown) can embrace fiscal responsibility, why can't our own DFL Governor Dayton? The public, and public employees, deserve better.

Often referred to as the "Death Tax," the federal government imposes a tax on the estate of deceased individuals regardless of the means of transfer. Many states initially jumped on the bandwagon and began taxing "unrealized" wealth, but more recently, some states are turning their backs on estate taxation or tweaking it in next coming years.

Instead of addressing head-on our state's longstanding structural deficit problem, we have kicked the can down the road by utilizing one-time money and accounting shifts.  The biggest Band-Aid of all? The federal stimulus funds.

This week's state budget update from Bob Williams, President of State Budget Solutions.

We're in our budget difficulties, in part, because we've assigned too many responsibilities to the state.

It is clearly time for Minnesota Governor Dayton to call a special session and allow the Legislature to pass the balanced budget which he has already vetoed.  The Governor should then sign the budget and end this standoff.  The Governor is causing real pain on the poor and elderly by this government shutdown.

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.

Will Minnesota Governor Mark Dayton join the rest of us living in reality? So far, it's not looking good.

Opinions on budget negotiations and the possibility of a state government shutdown in Minnesota.

Pensions are a bi-partisan problem; it will take a bi-partisan investment of serious political capital to change course in Minnesota.

It's that time of year again; one by one, states are passing their budgets for the next fiscal year. Shortfalls still loom for some while others have used a variety of tools to balance their books. Some states have taxed, others have cut, and still others have just gotten creative with their accounting.

Minnesota Governor Mark Dayton's move to raise the state income tax to be the highest in the nation ignores the fact that recent similar efforts have not been successful.