Editorial Roundup: Repeat of massive budget surplus should be prevented
Published 8:49 pm Friday, March 11, 2022
Minnesota’s state government bank accounts are riding high on a $9.25 billion budget surplus, Minnesota Management and Budget announced Monday.
That’s a number so big it needs some perspective. So here is some.
Minnesota’s “extra” money for the two-year budget cycle could:
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— Fund the state of South Dakota for about a year and half.
— Buy the New York Yankees. And the Miami Marlins … and the Oakland A’s.
— Purchase a little more than one-third of Delta Airlines.
— Match Sartell’s 2020 median household income for every household in the city for almost 18 years.
Less than three months ago, we wrote that a significantly smaller $7.7 billion projected state budget surplus was cause to re-examine the state’s ground rules.
“…a multi-billion dollar overshoot of what we thought we needed to run the state means it’s time to reexamine the policies that led here to ensure we’re leaving as much money as possible where it belongs – at home with the people who earned it,” we said then.
Now, in less than 12 weeks, the budget surplus estimate has $1.5 billion — a figure the Associated Press (an entity not known for hyperbole) called “enormous.”
The majority of the state’s surplus is directly attributable to higher-than-expected tax revenues. Less than 4% of the windfall comes from reduced state spending. That means we are sending vastly more money to St. Paul than it takes to run the government at currently expected levels for the next two years.
Responsibly, some of the overage is destined to fully fund the $2.7 billion budget reserve. Like a family with a savings account, it makes sense to have some money stashed.
As is to be expected, there are interests lined up to propose giving it back in the form of election-year tax cuts. There are interests lined up to propose shored-up spending on the state’s huge list of obligations, including education and critical deferred infrastructure maintenance. And there are experts who say the uncertain state of the economy and world events call for cautious husbanding of the money.
Simple answers — “give it all back!” or “spend it on things we need!” or “hang on to most of it in case things get worse!” — are always the most comfortable answers. They’re easy to understand and they’re emotionally satisfying.
But uncomfortably complex answers are often the best solutions to complex issues. The answer lies in “some of all of the above.”
Clearly our lawmakers will have to be willing and able to think critically about what’s best for Minnesota, not just their party or their re-election bids. And then they’ll have to be willing to make deals with people they don’t normally agree with.
But while deciding how divvy up $9.25 billion is a big job, the most important one is to begin to take a hard look at how our state revenue — taxes collected from people and businesses — became so out of step with budget needs, then take steps to prevent this from happening again.
Clearly, no one can expect to nail the balance of revenue and budget every year. Economic forces, systemic shocks like pandemics and wars, changes in other funding sources all make that impossible. But can Minnesota do better than take billions more than it needs from its people? We think so. Legislators faced with budget shortfalls do hard work and make hard decisions to resolve the imbalance. The same work is called for when a budget surplus reaches the level of “enormous.”
Are they up to the task? We believe they are. Most — not all, but most — public servants try to do what they believe is right, most of the time.
They’ll stand an even better chance if their constituents encourage complex thinking and accept complex solutions to complex issues. Fixing the system is the top priority.
— St. Cloud Times, March 4