Column: State deficit eliminated, tax increases avoidedFollowing a brief special session, the Minnesota House approved legislation that would eliminate our state’s $3 billion budget deficit.
By: Tim Kelly, Red Wing, The Republican Eagle
Following a brief special session, the Minnesota House approved legislation that would eliminate our state’s $3 billion budget deficit. It’s amazing, we’ve known about this problem for months yet it seems like every year lawmakers wait until the last possible minute before finishing the job.
So how did we make this problem go away?
The final agreement negotiated between Gov. Tim Pawlenty and legislative leadership is really not that glamorous. The large majority of the problem is eliminated through a K-12 education payment shift.
The Legislature also agreed to temporarily ratify many of the governor’s 2009 unallotments. And for those who strongly favor or oppose President Obama’s federal health care plans, there is a provision allowing the current or next governor to opt Minnesota into the program.
It’s worth noting that this agreement does not include tax increases, though the majority party attempted to raise taxes on many small business owners and farmers prior to the compromise.
Just days earlier, House Democrats proposed and approved a $400 million income tax increase proposal, despite the objections of Republicans and the guaranteed veto of Pawlenty.
While this agreement solves our short-term budget problem, it does little to nothing to address the massive deficit that faces Minnesota during the next biennium —more than $5.5 billion.
As usual with a compromise, there are portions neither side cares for.
The good news is we’ve solved the current shortfall, and the state will avoid a California-style bankruptcy. The bad news is a massive budget deficit awaits — meaning we’ll be having many of these same fiscal discussions next year with a new legislature and a new governor.
Tim Kelly, R-Red Wing, can be reached at (651) 380-4345