Despite already completing the heavy lifting of crafting a nearly $50 billion state budget in the first half of the two-year budget cycle, fiscal issues remain atop Minnesota’s legislative agenda.
Government coffers are in good shape — as the newly released state budget forecast shows (“Minnesota’s projected surplus rises to $1.5B, setting up spending battle,” StarTribune.com, Feb. 27) — but that’s mostly in spite of decisions in St. Paul, not because of them. The state’s economist credits the 2017 federal tax cut as a key driver of Minnesota’s economic success. Despite this, the governor and his allies have dismissed proposals for similar state-based tax relief, opting instead to detail all the ways that a projected one-time windfall could be spent over and over again.
Minnesotans understand that more spending does not necessarily bring better results. The historic nostalgia that Minnesotans know they “get what they pay for” rings hollower with every scandalous headline and every legislative auditor’s report detailing hundreds of millions in Department of Human Services waste, wrongful payments and outright fraud. With tax revenue already at all-time highs and spending increasing by near double digits year after year, many in the Legislature and administration still hunger for more, without doing the necessary work to reorient a bloated administrative state toward better results.
Criticism is easy, finding solutions much harder. That’s why Americans for Prosperity-Minnesota unveiled our 2020 Roadmap to Prosperity shortly before the start of the session. It’s a guide to help legislators make Minnesota the best state in which to live, work and raise a family. These critical reforms can be grouped into five areas: restoring fiscal stability, igniting the economy, investing in our future, expanding access to the American dream and protecting taxpayers.
First, the state already saves one-third of any surplus for a rainy day, which has led to a healthy level of reserves. The Legislature should now build on the success of federal reforms and return the remaining surplus to taxpayers.
Second, despite a balanced-budget requirement, billions in debt service for previous borrowing are eating away at our ability to pay for core responsibilities of government. While spreading payments out over the long term makes sense for critical infrastructure such as roads and wastewater treatment, the bonding bill should not become another supplemental spending bill. To put it in terms familiar to Minnesota families: Just because you can qualify for a big loan doesn’t mean you have to borrow as much as you can — or that you’ll be able to make the payments. We should limit borrowing to infrastructure-related projects of statewide significance, limit use of debt service when there is a projected surplus, and add new debt-service guidelines.
Third, the Legislature needs to reassert oversight of state agencies, quit giving away rule-making authority that has the force of law, and stop abdicating its own constitutional authority to regulatory bodies unaccountable to the taxpayer. Minnesota should have effective environmental protections. But regardless of your position on the merits of an individual project, it shouldn’t take 15 years (and counting) to review a project under those laws.
We should insist that state agencies follow the law and the science and issue permits in a timely manner, instead of creating a sea of red tape. Constant delays coupled with hollow reassurances to both workers and industry aren’t the leadership Minnesota needs. The Legislature could begin to rebalance our regulatory framework by requiring legislative review of the most economically impactful regulations proposed by the administration.
Finally, the Legislature needs to reject any additional government-imposed taxes or expensive new programs unless they are coupled with reform of long-term structural spending and address waste and fraud. For example, that means no more gas-tax increases until planning inefficiencies and diversion of funds to non-road projects are eliminated, and a hold on the state’s provider tax increase until progress is made in taming the pervasive mismanagement of state health care programs.
Increasing burdens come not only in the form of taxes, but also in energy mandates, a form of cronyism that causes significant rate increases. This will hurt some of our biggest industries and dig deeper into the pockets of Minnesotans already struggling to keep the lights (and the heat) on.
We’ve laid out a better plan. While maybe not all of these solutions can be enacted in a single legislative session, that’s no reason not to start. If we wait any longer, it may be too late.
Jason Flohrs is state director of Americans for Prosperity-Minnesota. On Twitter: @prosperityMN.