It’s not just an end game, but a start-and-end game for the governor and Republican legislators, sparring over the merits and demerits of Mark Dayton’s budget proposal.
The governor and Republican legislators are spending a lot of time trying to make what would seem to be an arcane point — the starting point for the Minnesota budget.
Dayton begins with a budget base of $34 billion for fiscal years 2010 and 2011 and ends up with a 2012-2013 budget of $37 billion, a two-year increase of 7.5 percent. The governor claims that the current budget base should include the $4 billion in federal stimulus funding and the savings from shifting K-12 education payments that were used to balance the current budget.
In criticizing the governor’s budget, GOP legislators start with a budget base of $30 billion and claim the governor’s budget proposals add up to a 22 percent spending increase. They argue that the stimulus money and K-12 savings were a one-time-only fix and the base should remain at $30 billion.
The differences are not only in arithmetic but philosophy.
The governor and his supporters maintain that Gov. Tim Pawlenty and legislators decided to pay for permanent programs (i.e., ongoing spending) through federal money and accounting shifts. They argue that just because that revenue drops out of the budget, the funding obligation continues. In their view, making up the shortfall in funding current programs should not be considered new spending.
Former House Speaker Margaret Anderson Kelliher, who negotiated the last budget, can support that argument.
“The theory from the federal government was this — we’re going to help states with the expectation that their budgets are in recovery mode two years ago,” she said. “Good idea, but most states have not really rebounded and states can’t deficit spend.”
Furthermore, Eliot Seide, executive director of AFSCME, the state employees union, describes rolling back the spending base as “barbaric” and says such a move will result in “risky cuts in public safety, education, and help for the vulnerable.”
Republican legislators, however, maintain that because this was one-time-only money, the state needs to return to working with the resources it has and not pick up the difference with tax increases.
The Minnesota Chamber of Commerce characterizes the Dayton budget as “more taxes, more spending, minimal reform.”
According to Tom Hesse, the Chamber’s chief fiscal lobbyist: “Our viewpoint is there was $30 billion in fiscal years 2010-2011. There will be $37 billion [in the governor’s budget] and that is a significant increase. Furthermore, Health and Human Services is projected to grow 37 percent, which the governor’s budget really doesn’t address at all.”
Hesse predicts that if the real cost-drivers of the state budget aren’t fixed, the taxes that are raised to cover spending increases will have to be raised again two years from now.
Kelliher describes the contrasting positions as dramatic story-telling: “One side says it’s a dark and stormy night; the other says the horses have broken free and are running wild.”
It’s also a reflection of both the governor’s and Republic legislators’ awareness of the public sensitivities to government spending.
Where each side starts on those bottom-line budget numbers will be a key factor as they make their cases to the public. And they will go a long toward determining total government spending when they end with a new budget in May.