Budget solution likely to be found in special session if compromise is made on behalf of Minnesotans

If there is a special session of the Minnesota Legislature, there must be a compromise on behalf of Minnesotans who have indicated in polls they agree to spending cuts and an increase in revenues.
Gov. Mark Dayton has agreed to spending cuts of $1.8 billion that will be painful, particularly for less fortunate citizens. He also has cut his taxing plan in half from $3.3 billion to $1.8 billion, taxing 2 percent of high-income tax earners.
In addition he has agreed to withdraw an increase in property taxes for properties worth $1 million.
Republican legislative leaders insist that $3 billion in spending cuts must be made and no new revenues should be raised.
They believe Dayton will “blink” and not call a special session just to raise revenues. He is not blinking.
A new budget has to be in place by July 1 to avoid a shutdown in state government.
The latest StarTribune Minnesota poll shows 67 percent agree with the governor’s solution to cut spending and raise revenues.
One way or another, Minnesotans will pay more taxes, either with 2 percent of high-income-earners paying more income taxes, or a greater percentage of local property taxpayers paying more due to a loss of state aids to local governments.
While the message has been mainly about increasing taxes, the projected spending cuts by the Legislature and the governor are very real and will hurt. Gov. Dayton said he is willing to negotiate the $1.8 billion in spending cuts with the Legislature.
With K–12 education accounting for nearly half the total budget, the biggest hit will come from Health and Human Services, which is a third of the budget. Republicans propose cutting $1.6 billion from Health and Human Services, twice as much as the governor wants. Some say the gap between the legislators and the governor could be as much as $800 million.
Democrats agree that funding for the poor and the disabled face deep cuts, even under the governor’s plan.
Both sides agree to shift $1.4 billion in payments to school districts to another year. This requires school districts to borrow money to meet expenses and pay the interest out of the operating fund.
Gov. Dayton, agreeing with the Senate plan, would increase the K–12 education per pupil formula by $50 in fiscal year 2012 and another $50 for fiscal year 2013.
Republicans would cut $800 million in local government aid, leaving it up to the cities and counties to cut local expenses and raise property taxes. Gov. Dayton would cut local government aid by less than that.
Republicans would cut $411 million from higher education. College presidents say they would have to raise tuition on the students. The governor’s plan calls for cutting higher education by $200 million less.
The Republican budget calls for cuts in transportation funding by $189 million, compared to the Governors’ $62 million. Transit officials say the Republican plan will result in higher bus fares and fewer routes.
Even before the latest poll results were published, the ECM Editorial Board agreed a combination of spending cuts and increased revenues were essential to achieving a desired balance while protecting the interests of all Minnesotans. —ECM Editorial Board (Editor’s note: This editorial is a product of the ECM Editorial Board. The Star News is a part of ECM Publishers Inc.)

Comments Closed

up arrow