The following is an editorial from the Ely/Cook/Tower Timberjay.
Minnesotans shouldn’t feel too smug as they ponder the unprecedented state budget disaster being faced by California. Our time may well be coming soon.
To date, most Minnesotans have been relatively sheltered from the full dimensions of our own fiscal disaster. Two billion dollars in federal stimulus funding helped backfill one-third of our projected $6 billion shortfall in the current biennium. Gov. Tim Pawlenty’s delay in payments of $1.8 billion in K-12 funding eliminated another third, while cuts in other government programs, from local government aid to higher education, to health insurance for indigent adults, accounted for the final third.
As far as most Minnesotans appear to be concerned, problem solved. But anyone paying attention to this year’s “solution” quickly realizes that our shortfall was plugged largely with one-time money or one-time accounting gimmicks that won’t be repeatable when the Legislature and a new governor craft our next biennial budget.
State finance officials are projecting another $6 billion budget gap in the upcoming biennium, and that assumes a reasonably robust economic recovery starting later this year. Yet even if the economy strengthens as expected, the state’s budget situation will continue to worsen, and the state will likely have far fewer tools available to fix the problems without inflicting real pain, on the residents of Minnesota.
Consider the following:
• Federal stimulus funding likely won’t be available in 2011. With Washington already awash in talk of taming deficits, the prospect for a second round of federal pump-priming looks increasingly unlikely. So don’t look to fill one-third of our budget gap with federal money.
• Most one-time accounting shifts have already been used. Gov. Pawlenty’s education funding shift solved nothing, but simply kicked the can down the road for the next governor. Indeed, the funding shift makes the state’s fiscal situation even worse by adding another $1.8 billion in obligations to the budget in 2011. Of course, given the realities of our budget mess, the Legislature isn’t likely to restore the shift, which will leave schools facing a funding cut of historic proportions. If so, it will push both the Ely and St. Louis County school districts into statutory operating debt. And they’ll have plenty of company.
The reality is that our state’s fiscal situation is a mess, with big deficits as far as the eye can see. Like California, our condition is the direct result of an anti-tax philosophy that has created budget deficits in Washington as well as in state capitols across the country. If we want to understand the impact here in Minnesota, we need only look to California, where a school system that was once held up as a model has disintegrated into one of the worst in the nation, with huge class sizes and plummeting test scores.
In California’s case, it was Proposition 13 back in 1978 that has proven the death of good schools and other public services. In our case, it was the no-new-taxes pledge of Tim Pawlenty and others that has created a similar set of circumstances. Like California, schools in Minnesota can anticipate real cuts in funding for the first time in years. It shows up this biennium in the governor’s holdback of 27 percent of school funding. Two years from now, when the state can’t afford to reimburse school districts, the real pain will begin.
And it won’t be just schools. From cities to counties, to highways, to nursing homes, the impact of our failure to invest in our state is just beginning to be felt by Minnesotans. The worst, unfortunately, is yet to come.
This Timberjay editorial was published July 15. It is reprinted with permission.