How MinnPost readers would balance the state budget

“Easy peasy,” was MinnPost reader David Greene’s take on closing the state’s $6.2 billion budget gap by working through our “fix the Minnesota deficit” exercise.

Many of those who commented, tweeted, blogged and emailed about the exercise seemed to agree with Greene’s conclusion: “This is really, really, really not hard from a numbers standpoint. It is really, really, really hard from a dealing with people with fingers stuck in ears standpoint.”

There were detractors, though. @JaredKaltwasser tweeted, “The MN budget deficit calculator by @MinnPost is really cool. Turns out it’s really hard to close a $6B deficit.”

I am not going to calculate the responses into percentages of readers favoring Option X versus Option Y. That would suggest this was a scientific survey. It was not. The point of this exercise was to give people a chance to weigh the range of real budget-balancing options that have been offered so far.

And the real treat you get from comments to MinnPost articles is not in the numbers of comments but rather the informed thinking that goes into the readers’ arguments and responses.

So I’ll summarize some of the points and respond to a few questions. (If you haven’t tried the exercise yet, you can run through it here before you read on.)

Right thinking v. political expediency
Many readers expressed in one way or another the view Lynn VanDervort summed this way:

“What I find most fascinating about this entire thread is: How many of our elected officials will have the courage to ‘do what is right’ as opposed to ‘do what is politically expected or expedient’. Doing the right thing will mean getting beyond the politics — and DOING the fiscally responsible move. The idea that the answer lies in either extreme is ridiculous.”

The trouble is we can’t agree on what is right.

One reader says, “STOP SPENDING MONEY WE DO NOT HAVE.”

Another says, “It is cutting education, medical services and basic support for our citizens in need that will bring down this state.”

If there is a flaw in the exercise it is that it invites individuals to make choices on their own rather than in messy and sometimes raucous political arenas.

“The decisions are easy when it is just one person with their own values and no one else’s feelings and thoughts need to be taken into account,” commented John Armstrong. “The best compromises are when everyone ends up equally miserable.”

Freeze at current levels?
Ron Gotzman wondered, “Is it true that if we would just freeze spending at current levels we would have a surplus?”  

By the bottom-line numbers, that appears to be true. The state’s estimated revenues for the upcoming two years are $32 billion compared with $30.3 billion in spending slated for this current biennium.

But that approach wouldn’t spare the state from a myriad of tough decisions. For example, the state delayed $1.3 billion in payments to K-12 schools in order to balance the budget last time around. Those payments are overdue, and now legislators must decide whether to delay them again.

Same goes for cuts in spending for higher education, aid to counties and cities, etc. The law says they were supposed to be one-time reductions. So legislators have to decide whether to make them permanent, extend them another two years or end them.  

Further, life goes on, and things happen. What do we do with people who murder and rob while spending is frozen? Do we say the prison budget leaves no room for locking them up? The prison budget may need to be cut or frozen, but we still have to sort through the strategies for making that work without letting dangerous people run loose.

Who’s rich?
Jesse Gaibor set off a debate in commenting, “$150k for a couple is NOT rich!”

This was in response to a choice on the exercise reflecting Gov. Mark Dayton’s campaign proposal to create a new 10.95 percent bracket for taxable income above $150,000 a year for married couples.

That sent several readers searching for hard data. One went to this page from the Census Bureau’s recently released American Community Survey. He found that a household making $150,000 or higher a year earns more than 92 percent of all Minnesota households.

That’s rich, said several other readers.

Big deals, small cuts
Andrew Bornhoft summarized one point made by many readers: “Cutting small programs is at the top of so many debates.”

What’s interesting, he noted, is that some of those flash-point cuts make barely a dent in the big budget gap. In other words, we fuss a lot over some points that may not be all that germane to the problem at hand. Of course, there can be subtle, political reasons to do that.

For example, the proposal to freeze state employees’ pay would save some $64 million. That sum may look huge to state workers, but it’s a baby step toward closing the gap.

More ideas?

Some readers were disappointed that the exercise didn’t include more options for cutting spending. One sent an email asking why we didn’t include creative ideas such as converting state employees to 401(k) retirement plans rather than fixed-benefit pensions.

A few other readers wanted to see more revenue options — some serious, some not. This came from @jeepsterdave: “Couldn’t find ‘Steal Iowa’s $’ option.”  

Seriously, we at MinnPost decided in advance to limit our choices to real proposals that have been offered in the form of bills before the Legislature, researched campaign positions or researched reports put out by civic groups.

I knew as I put this project together that a lot of great ideas are brewing out there. When they emerge as specific proposals, I hope to incorporate them in the exercise. So you may want to come back and give this puzzle another try.

Meanwhile, thanks for your interest.

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Comments (8)

  1. Submitted by Ron Gotzman on 02/11/2011 - 10:38 am.

    Sharon,

    Thank you for your article.

    Many MN families have had to make “real cuts” in family budgets. These are not “cuts in the rate of annual increases” but dramatic reductions. Health care premiums and co-pays have skyrocketed and fuel prices continue to increase. The Obama “summer of recovery” has barely moved the unemployment rate and after billions of federal stimulus spending (spending our children’s and grandchildren’s money) the economy stagers forward.

    Our home prices have dramatically been reduced, yet our property taxes go up. We all realize that no matter how much we increase spending on “education,” there will never be enough money to satisfy this large special interest group.

    The real danger is to dramatically grow the size of government in spite of the worst economy since the great depression.

    Taking more and more money out of the private economy in attempt to satisfy the insatiable thirst of Government is inconsistent with family budgets.

    It is time that big government experiences what families’ experience- real cuts.

  2. Submitted by donald maxwell on 02/11/2011 - 11:28 am.

    A factor that never seems to be recognized in the debate over government spending is that most of the money is spent on salaries for government workers, most of whom are not rich. The result of that spending is that it is money that returns to the marketplace very quickly. Reducing government staff does not stimulate the economy, it starves it.

    And who in their charitable right mind would suggest that anyone should lose a fixed-benefit pension in favor of gambling on private investments? Pension benefits can be reduced in scale, but to throw them to the winds of the market is unconscionable.

    A lot of the very wealthy in Minnesota, and in the country, advocate increasing the progressivity of income taxes. Do they have to beg the public to increase taxes at the top levels? Something needs to be done to stop the increasing concentration of wealth at the top, and modest increases in taxation are only a small step in that direction.

  3. Submitted by Pat Igo on 02/11/2011 - 12:01 pm.

    ……..and thank you Ron (#1 above) you said it all! and it is a prettty simple solution isn’t it?
    Government has to “get it” and we have to go without our “entitlements” for a time. We owe this to the next generation.

  4. Submitted by Joel Shinder on 02/11/2011 - 12:07 pm.

    Our Federal and state governments fail to tax the underground economy as much as it should be taxed, given that it benefits from the systems taxpayers struggle to provide. Has anyone even measured the size of that income-tax-free system? Low or non-existent sales taxes place additional burdens on land-based lives. Amazon-like rivers of tax hemorrhaging drown schools, flood our roads, wash medical services away, you name it.

  5. Submitted by Jon Kingstad on 02/11/2011 - 09:37 pm.

    This exercise reminds me of the experiment where students (as it was in the experiment) did not demure from raising the voltage levels of other students and who were demonstrably in pain from the increase in voltage levels. Welcome, “1984”.

  6. Submitted by Sean Broom on 02/15/2011 - 01:20 pm.

    “One sent an email asking why we didn’t include creative ideas such as converting state employees to 401(k) retirement plans rather than fixed-benefit pensions.”

    Because most people working at the state who haven’t been there for 30 years don’t have defined benefit pensions, and only have 401(k)’s? Maybe?

    “Government has to “get it” and we have to go without our “entitlements” for a time. We owe this to the next generation.”

    Do you know what an ‘entitlement’ is Pat?

  7. Submitted by vladimir gagic on 02/15/2011 - 03:39 pm.

    How do to fix the budget deficit? Simple, put people back to work so they stop using unemployment benefits, start paying payroll taxes, and buy things and thus pay sales tax. Budget deficits follow from economic downturns; they don’t cause them. Keynes figured all this out, as did FDR, way back in the 1930s. All austerity will do is make the rich richer and the poor poorer. It’s too bad well meaning progressive seem to have bought the nonsense of new democrat Clinton’s neo-liberal deficit hawkishness.

  8. Submitted by Arthur Swenson on 02/22/2011 - 11:36 am.

    The cancer of “Reaganomics” continues to grow, now threatening every aspect of our society. If there was ever any doubt about what would trickle down” on the rest of us from tax breaks given to the rich, we have now had 30 years to experience its effects.
    If anyone has any evidence that the money NOT paid in taxes since the reductions pushed by Reagan (federal) and Ventura (state) have resulted in increased jobs, economic well-being, or any of the other long-promised benefits, I’d like to see it.
    The only result I’ve seen is the “new normal” of bigger deficits, lower expectations, less care for our children, the sick, disabled, and aged; along with a new mantra: “I got mine –you get yours, if you can!”

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