Editorial: The state’s financial reckoning
Published 7:29 am Friday, January 8, 2010
A lone district judge’s ruling has pushed the day of reckoning for Minnesota’s governmental leaders to a much faster arrival date. This was needed.
A Ramsey County District judge, in a ruling ordering reinstatement of funds cut to a special supplemental aid program by Gov. Tim Pawlenty’s unallotment, said such authority was misused. Pawlenty says he will appeal and may even re-establish unallotments in the wake of the new forecast. He added he will fight against tax hikes but work with the Legislature to find a solution.
Nothing has changed that makes us think that will happen any easier than before. Let’s go back to revisit what got us here.
Last January, the U.S. economy was nearly frozen and the federal government was throwing out multi-trillion-dollar “stimuli” in hopes to get the spark back. In February, the state already was warning Minnesota’s revenues would not recover for years. This harsh reality was not being accepted by our state leaders who acted like this was a temporary situation and waited for some federal bailout.
Pawlenty’s January budget proposed delaying K-12 payments and some expensive bonding. The House DFL rejected bonding and offered up new taxes and cuts — but it kept the K-12 payment shift as a solution and even added to it.
The Senate DFL upped the political ante even more by proposing tax increases of almost 50 percent that would have hit every Minnesotan hard and cutting even more than the governor or the House wanted from the general fund. And instead of rejecting the K-12 shift, it wanted to cut nearly $1 billion from the schools and that plan was going nowhere.
The two DFL chambers couldn’t reach any compromise all through the session, and Pawlenty, rather than trying to broker a deal, used his veto pen to the legislative budget and cut the $1 billion tax bill and shifted the $1.8 billion K-12 payment to a later date. His unallotments did not produce the savings and created a financial crisis for someone else to deal with later.
The state now looks at a 2010 with $1.2 billion shortfall in the current legislative year and a whopping $5.5 billion for two years after that. Analysts are predicting that delayed payment is more of a budget cut that schools will have to absorb.
Pawlenty, meanwhile opting to not run for re-election, thought he at least had a temporary fix and is by all appearances now focusing on a more national goal.
That is, until that lone district judge put the problem back squarely where it belongs. Other suits will surely be coming challenging the unallotments. One political scientist, University of Minnesota professor Lawrence Jacobs, reportedly observed that this “decision is a lightning bolt that the basic structure of Gov. Pawlenty’s budget may fall apart. The governor will be exposed to what could be a protracted legal and political battle.”
More importantly, it should bring our state’s leaders back to the table to do what should have been done in the first place — make those tough decisions for the future. Businesses and households across the country have had to deal with the shaken economy in a far faster fashion than the state has.
— The Free Press of Mankato, Jan. 2