Column: Al Arends, My Point of View

Minnesota is suffering from a $6.2 billion debt, and nobody wants their budget cut. If we were to add up the total amount the state owes, it would be more than $50 billion. Some of the debt is in state bonds, and some of it is in unfunded pension liabilities, but it all adds up to a large commitment made by the state Legislature. It appears that the taxpayers are going to be stuck with the bill. What are our legislators going to do to solve the problem? There are a lot of ideas floating around, and it’s going to be interesting to see what actually is enacted to solve the problem.

Will the Legislature resort to raising taxes on those making more than $150,000 as proposed by Gov. Mark Dayton? I am sure they can pay a little more without it cramping their lifestyle, but will it result in more revenue? Minnesota is already considered a highly taxed state, and many older citizens choose to take up residence in other states where taxes are lower. We also could see businesses move out to lower-taxed states. This happened to us in the ’70s and ’80s. Before 2011, two states tried raising income taxes on the wealthy, Maryland and Oregon, to reduce their debt, and revenue actually went down because of the migration of higher income people. Florida and Texas have already taken the position that they will not raise taxes. We have to be very careful when considering this option or we could actually see a reduction in state revenue.

Another option is to reduce state aid to schools and LGA to cities and towns. They have cut aid to schools and deferred payments causing many of the districts to borrow money to make their budget. School boards and administrators have been lobbying the Legislature to pay their commitment. If the state does not pay the schools what they owe them, it will result in substantial cuts of teachers and children will end up in much larger class sizes. It could result in much higher property taxes to keep our schools properly funded.

Our city council, mayor and chamber of commerce voted unanimously against cutting LGA to Albert Lea and other communities. Was this the proper action to take? This action said, “Don’t cut us; cut someone else. I like my streets plowed, police and fire protection and our nice parks. The new courthouse, the walking trails and new sidewalks, ice arenas and skating rinks and a clean lake are all very nice, but where is the money?” It makes our local politicians look good to the voters in this area, but does it solve the problem of our state being bankrupt?

Possibly, we should cut wages and benefits for city, county and state employees or cut back on the number that are providing services. Of course, this is probably what most people who don’t work for government are going to say, because it doesn’t affect them, but if you are a government employee, you sure don’t want to be cut and take the burden to pay off the state debt. We do need to keep wages and benefits of government employees and those people who work in the private sector in balance, and today it appears that the scale favors public employees significantly.

Another area is our welfare system, and these are generally the people who are most vulnerable and need the most help. But, is our welfare system a magnet drawing people from other states? Should welfare recipients be given a debit card that can be used in other states? In the year 2008, more than $10 million was spent in 49 other states. This was money raised through taxes in Minnesota and spent in other places — even Hawaii.

There are other areas that need to be looked at, such as transportation and natural resources. The size of government is immense, and no one wants their benefits reduced. However, when you are operating with a $6.2 billion shortfall, everyone needs to share in balancing the budget. I am not against raising taxes if the state and local government are run efficiently, and if they are competitive with other states and the private sector. We cannot afford to be an island of high taxes, high wages for public employees and a benefit package far superior than what we find in other states and in the private sector.

We will have to reduce services, and we will have to create a culture that is very friendly to the private sector. It is the engine that powers our economy. Previous legislatures have dug a big hole with promises and big government. Now a legislative session with a Republican majority is going to have to make decisions that many of us are not going to like. Is our action going to be “cut someone else, but don’t cut me”?

Albert Lea resident Alan Arends is a co-chairman of the Freeborn County Republican Party.