Change That Will Bankrupt You

On Monday (12/1) I got the following email from my former State House Rep (yes I am still on his email list).

The biggest issue of the upcoming 2009 legislative session will be how to balance the budget. As we approach the start of session in January, the scope of what we face is coming into focus. Here is the latest
information: The state collected $31.4 million less in taxes than had been expected for the month of October. This is the first time that tax receipts have fallen below predictions since the state rolled over its calendar into a new fiscal year on July 1....
On December 4, a complete budget forecast will be released that predicts how much tax money the state will collect versus the expected growth in government spending. It is widely believed that this will show spending outpacing revenue by a billion dollars or more. Unlike the federal government, Minnesota has to have a balanced budget. We can*t just spend away and run up massive deficits with no regard for how to pay them back. It also means that we have to make tough decisions every two years about how we tax our citizens and how we spend that money.

Pardon the interruption but I have to remind you all that two years ago when the House DFL caucus was handed an overwhelming majority, the State of Minnesota had an almost $2.2 BILLION DOLLAR surplus! Even then, Rep. Beard was warning about the pending recession (as I remarked here). The DFL Majority, in their eternal wisdom, went on a spending spree of epic proportions. Well on Thursday, the Strib reported the grim forecast - Minnesota went from a $2.2 billion dollar surplus in February of 2007 to an almost $6 billion dollar DEFICIT! That is a turnaround of over $8 billion dollars in less than two years!

My good friend Gary Gross has a couple of posts up about his State Senator Tarryl Clark from this week. She has alternately said that there is "no fat" to be trimmed from the state budget to "she" won't raise taxes in light of this record deficit and then points out that the House DFL Caucus doesn't have a lot of credibility when it comes to that pledge.

The week ended with this email update from SD35's other wonderful representative - Mark Buesgens.

Our government is in a deep, deep financial hole, and the first step to climbing out of it is to stop digging it even deeper. Spending went up almost 10 percent in the last two years, and 12 percent in the two years before that. In just the last four years, state spending has increased by a whopping $ 6.5 billion dollars. If the Legislature and the Governor could simply agree to go back to the 2005 spending level, we would be looking at a $1.3 billion dollar surplus.
Government’s role in helping our state achieve more prosperous times is to focus on taking actions that preserve liberty, ensure public safety and develop the necessary infrastructure for a vibrant economy.
Minnesotans are industrious, intelligent and hard-working. Provide them with the conditions for success and they will succeed. The attitude by some politicians that the people are ‘victims’ and government must save them by creating more programs and more spending will only prolong and deepen the current financial crisis. That attitude must be utterly rejected.

Put down the shovels indeed. Unfortunately that is a trait that the Minnesota Legislature is not prone to taking. The Minnesota budget has swung from big surplus to big deficit for years. From the top of the biggest wave to the bottom, the budget has gone from one extreme to the other...but what (if anything can be done)?

Simply put the Minnesota Legislature needs to learn how to truly balance a budget so that it is not tossed about like a reed in the ocean every time the economy hits a bubble or a burst! It needs to save during the good times so that it is able to weather the bad - just like normal, responsible taxpayers do.

In 2006, the voters of Minnesota voted for change. How are you liking that change?