Arne Carlson credits Minnesota’s diverse economy, not politicians, for budget surplus

Arne Carlson
JonathunderArne Carlson

As leaders from both parties alternately take credit for the state’s new budget surplus, they could heed some observations from a Minnesota governor who presided over a brief era that produced both budget surpluses and balanced budgets without borrowing or new taxes.

Arne Carlson, who served as governor for eight years beginning in 1991, gives minimal credit for the predicted billion-dollar surplus to any political decisions.

“In this particular case, what you’re seeing here is a normal recovery,” he said in an interview. (Disclosure: During part of his term, I served as his deputy chief of staff.)

In Minnesota, in particular, he said, recovery has been enhanced by the strength of the state’s core industries.

“We are leaders in health care, medical devices, agriculture, and these are critical resources in a global economy,” he said. “Minnesota is very blessed.”

Carlson gives a nod of approval to Gov. Mark Dayton for balancing the 2013-2014 budget without gimmicks.

“The truth is, the budgets over the Governor Pawlenty years were never in balance, and we lost our credit rating,” he said.

But Dayton’s cure was too long on tax increases and too short on budget efficiencies, he said.

“It’s fair to say the tax increase did not dent revenue, but it did not bring a bag load of money either,” he said. “What was disappointing was lack of focus on cost savings.”

And not just budget cuts, he said. Carlson believes state budget architects should start a bold, new experiment in designing how government functions.

“The model we have now has been around for 50, 60 years,” he said.  

Carlson suggests that the Dayton administration and Legislature assemble a talent pool with participants from business and higher education to design a budget that stimulates state employment through innovation.

“Not only in terms of the tax system but also in terms of spending,” he said. “Maine went toward a flat tax that really helped stabilize them. That’s one area we could explore.”

He offered more general advice on spending. Government, Carlson said, should analyze its budget, determine what investments are most likely to attract new and younger workers and eliminate state spending that is no longer useful.

“We got locked in the past, but now you have to learn to rethink,” Carlson said. “It’s a good time for Minnesota to start planning its future.”

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Comments (10)

  1. Submitted by Robert McManus on 12/06/2013 - 01:51 pm.

    or perhaps…

    Or perhaps, Gov. Carlson, we could give away more protected state lands(Bayport Wildlife Management Area now a “green” housing development) to corporations for factories to bring ostensible jobs which then are shipped to Wisconsin, the former state lands being developed for housing. That seems like a good economic model don’t you think? If I were to pull a scam like that, I’d be in prison.

  2. Submitted by Rick Ryan on 12/06/2013 - 03:09 pm.


    Didn’t Ms. Brucato work for Governor Carlson at one time? I seem to remember that she was the spokesperson for his administration, perhaps I am mistaken. If so, it should be disclosed. No that it would color this story but in the interest of honest journalism it should be noted.

    Hindsight is always clearer than today’s fog.

    I also remember that during one of the budget shortfalls during Carlson’s Administration we began the dis-investment in needed road maintenance with a promise to pick up the slack later that was never realized.

    • Submitted by Don Effenberger on 12/06/2013 - 03:41 pm.

      Good point

      You’re right. We should have acknowledged it. We usually do, and that’s our policy. That disclosure about her work with Gov. Carlson is contained in her more-complete story-page bio But it should have been noted in the story, too. I’m adding that to the article.  — News Editor Don Effenberger

  3. Submitted by David Frenkel on 12/06/2013 - 06:57 pm.

    follow the money

    MN borders the state with the fastest growing economy, lowest unemployment and largest state surplus, ND. The oil boom in western ND has plenty of opportunities but there seems to be no clear coordination between MN and ND to maybe create high tech ventures to help ND with all the issues around oil fracing.
    There are more and more MN companies doing business in MN but the state could certainly help with finding new opportunities.

  4. Submitted by John Appelen on 12/06/2013 - 11:02 pm.

    Excellent Points

    “We are leaders in health care, medical devices, agriculture, and these are critical resources in a global economy,” he said. “Minnesota is very blessed.””

    Especially after reading this article and the associated comments…

  5. Submitted by John Ellenbecker on 12/07/2013 - 05:27 pm.

    Tax increase didn’t harm economy

    Just as the Clinton tax increases didn’t harm the economy (in fact they balanced the federal budget and we saw the longest sustained economic expansion in our history) the Dayton tax increases haven’t harmed the state’s economy. Minnesota’s economy continues to outperform the nation’s – which demonstrates that it is time to bury the notion that higher taxes will inherently harm economic growth.

  6. Submitted by Henk Tobias on 12/08/2013 - 02:53 pm.

    Funny Tax increases…

    …as viewed from the right, always have detrimental impact, but in the case of the Clinton tax increases you are saying yes they had a positive impact but quibble on how much. I guess that means we’re making progress.

    On another note, Scotty Walker cut the heck out of everything in WI. How do our two economies compare?

  7. Submitted by Henk Tobias on 12/08/2013 - 02:54 pm.

    We had the same diverse Economy

    While Pawlenty was Governor didn’t we?

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