Bigger than the recount

Had a friend tease me earlier this week about focusing a bit too much on the recount. “What about the state budget deficit?” he whined. “That will be the big local political story in 2009!”

He’s right, of course, though our excuse is the budget forecast won’t be out until Dec. 4. Anyway, MPR reports this afternoon that Gov. Tim Pawlenty (who should know) talked of a “substantial” multi-billion deficit.

Considering Wisconsin just announced a $5 billion deficit, how bad could Minnesota’s be? Informally, I’ve heard numbers ranging from $3 billion to $5 billion, clustered around $4 billion.

How big is that? Six years ago, Pawlenty erased a $4.23 billion deficit through shifts, cuts and fees. (As MPR noted then, “Senate Majority Leader John Hottinger said Democrats became convinced Gov. Tim Pawlenty, a Republican, was prepared to shut down the government rather than break his pledge not to raise taxes.”)

Local governments saw their state aid cut by 25 percent (which especially nailed poorer and more urban communities), and basic per-pupil aid stayed flat, though overall K-12 spending fell 2 percent.

This time around, we don’t have a billion-dollar tobacco fund to drain, and we’ve already exploited a lot of the wait-til-next-year funding shifts. Tax hikes? DFLers have all but ruled them out, and Pawlenty isn’t looking any more moderate about raising them.

In other words, it’ll be ugly, and we’ll look back at this recount with nostalgia.

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Comments (4)

  1. Submitted by Annalise Cudahy on 11/21/2008 - 05:06 pm.

    Yup. I’ve been thinking about this for a while, too, and I see no reason it won’t be as big or bigger than Wisconsin’s. After all, our state’s share of state + local is larger than theirs (67% of all state and local taxes in WI 2004, 81% in MN).

    Our economy may be stronger, but I wouldn’t count on it. This is going to suck out loud, to use the financial term.

  2. Submitted by Chris Johnson on 11/21/2008 - 05:08 pm.

    If Pawlenty had listened back in 2002 to moderates with some financial common sense, like John Gunyou and Arne Carlson, we wouldn’t be in this fix today. As they and the like minded said, the structural budget problem needed to be fixed and the funds shouldn’t be raided until we really had a disaster that was unavoidable — like today’s shortfall.

    Brilliant, Mr. Pawlenty and brethren. We’re now screwed because you were lazy and looking for political gain rather than the welfare of the state 6 years ago.

  3. Submitted by Alan Ingram on 11/24/2008 - 12:30 pm.

    Chris has it exactly correct.

    I would only add that DFL leadership must also share in the blame. A much braver stand should have been taken against those who purveyed the “no new taxes” pledge. The MN Taxpayer’s League and its leader, David Strom, played to politicians’ worst instincts, although I think DFL and moderate Republican legislators should have known better. I cannot imagine a campaign that did more damage to Minnesota and its people. They really should have called Pawlenty’s bluff and let him try to shut down the state. Gingrich went down when Clinton called his bluff on a federal shutdown.

    There were many factors in this debacle. One was the disasterous agreement by then Rep. Tim Pawlenty and Sen. Roger Moe that inflation be counted in predicting revenue, but not in expenses, so they would not have to conduct their 1998 gubernatorial campaigns from dealing with a deficit.

    We’re better than this behavior.

  4. Submitted by John Hottinger on 11/24/2008 - 04:57 pm.

    One other factor different now. In 2003 DFLers unanimously passed a nearly $2 Billion tax increase out of the Senate knowing that the Republican House wouldn’t come close to agree. All the outside commentators and strategists said it was stupid to pass a tax increase when there was no way of actually enacting it. We did it so we could present Minnesotans with an alternative message of possibility and hope. Only 3 DFLers actually voted for the Pawlenty budget and EVERY Dfler used the Pawlenty-Republican budget during the next two/three campaigns. Now we have a solidly DFL Senate and House and we still know that Pawlenty’s ties to the wealthy and his ambition are stronger than his ties to the middle class and the bulk of Minnesotans.

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