Dead Set on Destruction

Even Republicans are alarmed by the governor's fiscal mismanagement

Incredibly, Pawlenty continues to blithely claim that he can balance the upcoming budget without raising taxes. While it may make for good reelection politics, it's a position that alarms even Republicans like Gunyou and statewide business leaders from the Chamber of Commerce. They fear that such foolish policy will severely damage the state's economic competitiveness for years to come.

Begin with K-12 education, which now comprises a whopping 44 percent of the state budget. The website for Pawlenty's own Department of Employment and Economic Development has a 2004 missive titled "Business Location Factors," which states, "The most common proxy indicator of workforce quality is education. The share of the population with a high school education often matters when it comes to business growth."

Yet for the first time in modern state history, K-12 schools are enduring a real-dollar cut in government spending this biennium. Just keeping up with such costly (and inflation-sensitive) line items like health insurance for school personnel will add tens of millions of dollars to the K-12 budget next biennium--and that's without any improvement in services. Meanwhile, most local school districts have already used up their ability to raise local property taxes to supplement state education funding.

James Dankert

Moving on to transportation, bus operations face the same inflationary costs and social-engineering cuts as schools do. And highway congestion is now a way of life in Minnesota, due in large part to the fact that the state hasn't raised the gas tax since 1988. "The Chamber of Commerce says we need a billion dollars a year for transportation, and that's just on roads, not public transportation," Gunyou says. "Everybody wanted to raise the gas tax--the chamber, other business groups, city and county governments. Everybody but the Pawlenty administration. So instead of raising the gas tax, the state borrowed $800 million."

Gunyou maintains that the money was borrowed from a future federal highway allotment and some of it was in 20-year bonds. "To get what isn't even a year's need according to the chamber, we have borrowed for 20 years," he says. "And how are we paying for the bonds? By cutting highway maintenance. There will be less patching and repairing and upkeep. That's just grossly irresponsible financial management."

 

The list goes on. Health care and human services make up 26 percent of the budget, making it a good bet that more citizens will be priced out of state health insurance if Pawlenty has his way during the next session. As has been noted before, sick people don't drop out of society when their insurance isn't covered; they just become more expensive patients, driving up the cost to hospitals, private insurers, and, through Medicaid, the state and federal governments.

It's not hard to see that education and health care/human services eat up nearly three-quarters of the state budget. How will Pawlenty make up a billion dollars without ravaging one or both of these budget areas?

The neoconservative philosophy, to which Pawlenty obviously subscribes, is that the best way to get rid of government is not to rail against the services provided, but to simply starve the funding sources and then claim that you have no choice but to make the cuts. During his brief tenure in office, he has done exactly that, while laying waste to the state's proud heritage of fiscally prudent investment. This panders to the false notion that government is increasingly reaching into our pocketbooks, but it's worth noting that today, the percentage of state and local government taxes on Minnesota earnings is less than it was a decade ago.

And then there are profound job losses. According to the U.S. Department of Labor statistics, from January 2002 to May 2004, approximately 7,500 government jobs have been eliminated in Minnesota. Lest you think this is a national trend, Minnesota is one of only 12 states whose total number of government employees declined in both 2002 and 2003.

According to Christina Macklin, policy analyst for the Minnesota Council of Nonprofits, another 1,000 jobs have been lost in the nonprofit sector during that time, many of them due to state budget cuts. These were well-paying jobs--averaging about $15 an hour, Macklin says--with workers providing services to Minnesotans who are still very much in need.

Admittedly, there is one bright spot. Maybe all these folks can find work hawking beer and peanuts in the new stadiums Pawlenty continues to insist the state can help provide for Carl Pohlad and Red McCombs. To be fair, when it comes to budget priorities, the governor certainly keeps his eye on the ball.

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