From: Rep. Steve Drazkowski
As expected, Minnesota’s economy continues to improve, according to state economists. This is no surprise considering we’ve had positive economic forecasts for the past 12 months.
Recently, our financial experts projected that Minnesota has an additional $1.3 billion surplus for what remains in the 2012-13 fiscal year, though they also noted that the Fiscal Year 2014-15 budget still shows a projected $1.1 billion deficit. By law, that $1.3 billion, most of which comes from a school shift that was approved by legislative Democrats in 2010, will be used to pay back our schools. Doing so will nearly triple the amount our schools will receive during this biennium.
But in terms of future state budgeting, it’s worth mentioning that if President Obama and congress can’t reach a deal before our country decides to jump off the fiscal cliff, our state’s fiscal numbers could change dramatically for the worse. But if they find common ground, it seems reasonable that our $1.1 billion deficit projection could decrease, if not be eliminated altogether. The February forecast number has improved in comparison to the original November forecast in every year since 2008.
The problem – from my perspective – is that Republicans are no longer in charge of the Legislature. And that likely will mean a radical change on tax and spend issues.
There can be no dispute that we are leaving the budget in much better shape than when we inherited it from the Democrats - and our state economist says so, too. In fact, let’s analyze some of the numbers. In January 2007, Republicans handed legislative control to the Democrats, along with a $2.2 billion surplus. In January 2011, they turned it over to Republicans with a $6.2 billion deficit, and they now take over after the budget shortfall projection has been reduced all the way down to $1.1 billion for the next biennium.
How did we get here? We’re spending less and bringing in more revenue thanks to the reforms we’ve enacted over the past two years.
Our unemployment rate is a full two percent lower than the national rate, which has given certainty to job creators because we addressed our structural budget gap, left tax rates alone, and lowered regulations.
Going forward, I will be advocating that we continue down the path of fiscal responsibility. We’ve added $900 million to the state government’s budget reserves, refilling them to the $1 billion statutorily prescribed balance. We also paid off $1.6 billion in the money owed to schools, fully paying off the amount that the Republican-led legislature borrowed in 2011 and over half of the amount that the Democrat-controlled legislature borrowed in 2010. This is a full $2.5 billion of improvement in the state’s structural fiscal balance, placing the state education shift within 7.5% points of the 90-10 normal arrangement - the best position in over three years.
Forcing government to live within its means has paid dividends to the people of Minnesota by inspiring economic activity. Hopefully, the Democrats have learned from their 2007 mistakes and will also choose to control spending over the next two years. It worked well for Minnesota, and I hope the Governor and Democrat leaders are taking note.
Please let me know what you think. You can write me at 401 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd, St. Paul, Minn. 55155. You can call me at 651-296-2273 or e-mail me at firstname.lastname@example.org.