Column: Phil Krinkie, Guest Column

For six months state legislators and the governor have been trying to come up with a solution to the state’s $5 billion budget shortfall.

Both sides claim they have compromised from their starting points, yet they appear to be no closer to a balanced budget solution than when they started in January. Seldom have we seen a legislative deadlock with little or no movement from either side over such an extended period of time. The roadblocks to a budget agreement are many, but in order to get a deal done the first step is to navigate around some of the major obstacles.

The first road block is to recognize that each of the leaders in this struggle is new. Gov. Mark Dayton is a first time governor with little or no executive leadership experience. Both Senate Majority Leader Amy Koch and House Speaker Kurt Zellers are new to their positions as well. A situation with three new leaders creates a level of uncertainty.

Each of them is understandably fearful of failure in their new role. In addition, both Sen. Koch and Rep. Zellers are dealing with many new members in their respective caucuses. This adds a dimension of caution to their decision making process. This combination of new leaders, many new members and a massive budget deficit on top of a large divide in political philosophies inevitably is contributing to a reluctance to make quick decisions.

The budget challenge has been exacerbated by the previous use of one-time federal funds and accounting shifts, used to resolve last year’s budget shortfall. These one-time fixes merely postponed the pain and pushed the problem into this year’s budget. The state budget on auto pilot for the next two years is projected to grow by 29 percent.

Perhaps the only thing that both sides of this debate can readily agree on is that this is unsustainable. For now this is where the agreement ends.

Dayton for his part has a one-size-fits-all solution — increase taxes. First, it was $4 billion in new taxes, then it was $3 billion and now it is $2 billion. Gov. Dayton has locked in on his position that there must be a tax increase and more specifically an income tax increase to solve the budget impasse.

He is focused only on the revenue side of the equation and refuses to seriously consider the expenditure side of this issue. He has failed to realize that the top 2 percent of wage earners already pay 30 percent of Minnesota’s income tax. To say they don’t pay their “fair share” is false.

On the legislative side of the debate the GOP leadership dug themselves into a big hole when they decided to “hold harmless” the K-12 education budget.

K-12 spending accounts for 40 percent of the general fund budget. Their actions to increase K-12 spending by almost a billion dollars meant they were forced to make larger budget reductions in other areas.

While this strategy initially averted a fight with the teacher’s union, it required them to make difficult budget cuts in other areas. Even with this challenge, the Legislature did pass a balanced budget without a tax increase that spends 12 percent more in general funds than the last biennial budget.

But given the strong differences in philosophies how do both sides come to an agreement that will keep key functions of state government operating?

First, Gov. Dayton must realize that Minnesota’s tax revenues are projected to increase by more than $3 billion in the next two years — some could argue we already have a tax increase. To raise taxes another $2 billion will only stifle our slowly recovering economy. Second, Gov. Dayton must take a serious look at the expenditure side of the balance sheet and propose real reductions and reforms in state spending.

As for the Republicans, they never should have proposed a tax reduction with a $5 billion projected deficit; it was a nice political move, but not realistic given the circumstances. And if you aren’t willing to raise taxes to balance the budget to fund ongoing state services, why would you even consider raising taxes to build a new Viking Stadium? The stadium issue took them off message. Perhaps the Republicans should have advocated for some level of reduced spending in all areas of the budget, a shared-pain approach. In addition, they should have explored sources of revenues that did not add to Minnesota’s current tax burden.

In response to Gov. Dayton’s proposal of a mediator, perhaps a few old pros from days gone by could help break the budget stalemate. Former legislative leaders Roger Moe and Steve Sviggum have faced this situation numerous times, and somehow both of them managed to survive politically while passing balanced budgets. It may not work — but it’s worth a try.

Phil Krinkie, a former eight-term Republican state rep from LinoLakes who chaired the House Tax Committee for a while, is president of the Taxpayers League of Minnesota.