Column: Finances are better, so tax reform is next
The start of the 2014 legislative session was met with more good news for Minnesota: Our recent state economic forecast projects a $1.23 billion surplus for the year ahead.
Although partisans may disagree over what produced this welcome budget news, it's clear that Minnesota's healthy fiscal outlook owes itself to a combination of a strongly rebounding state economy as well as prudent, long-term budget decisions from the 2013 session.
Following a decade aboard the state revenue roller coaster, the recent budget forecast anticipates a smooth fiscal ride in the years ahead. For policymakers, it's important we learn the lessons from our last significant surplus and plan accordingly.
Rather than return to short-term budgeting that just barely pays the bills and leaves no cushion for absorbing economic downturns or other fiscal shocks, Minnesota ought to restore its budget reserves. This approach will allow for long-term investment and serious reform instead of short-term fixes and continued budget squabbles, special sessions and state government shutdowns.
With our fiscal house in order, the Legislature next should set its sights on meaningful tax reform that paves the way for continued economic growth, improved state competitiveness and enhanced quality of life. This is a large undertaking, but we can make progress now by focusing on federal tax conformity and urgent repeal of unwise business-to-business sales taxes.
Likewise, we can make headway on the growing backlog of needed infrastructure investments throughout the state. An appropriately-sized bonding bill that invests in projects of regional significance and economic drivers is a start. But we also need to have a separate discussion targeting vital infrastructure such as roads and bridges, sewer and water, and broadband telecommunications.
Matched with investments in education and human capital, a healthy state budget, smart tax code and sound infrastructure are the key ingredients for Minnesota's continued economic vitality and high standard of living.
Although we can debate the proper role and size of government, we'd all agree that government should provide certainty and predictability wherever possible. Our families, businesses, schools, and communities all benefit from sound state budgeting, prudent policy making, and smooth implementation of reform.
Where we’ve missed the mark, we need to improve — and where we can provide added clarity in law, we need to hustle. Together, we’re making great strides in Minnesota, but our work is far from complete.
Matt Schmit, DFL-Red Wing, can be reached at email@example.com or 651-296-4264.