The state budget debate ended on a predictable note this year. It’s no surprise that Gov. Tim Pawlenty rejected, as he has for seven years, ideas of raising taxes, although he did offer instead to raise revenue by borrowing. The DFL-controlled Legislature proposed a mix of cuts and, also no surprise, offered some higher taxes as new revenue.
Pawlenty vetoed the DFL plan and will not call the Legislature back to try again; he will simply unallot spending. To his credit, rather than decide what to slash solely on his own, he has asked legislators to provide input on what to cut, as well as ideas from Minnesotans in general. Unfortunately for those Minnesotans, the issue isn’t that simple. The central question really is what kind of state do we want, instead of: do we want higher taxes or fewer services?
The kind of state we want is a much more complex and interesting question. We certainly can keep taxes or interest on bonds as they are, but as we will soon learn there will be an impact. Case in point: We can cut the governor’s proposed $381 million in medical care for people making less than $8,000 a year. We can also have a higher number of people without insurance. That will shift the burden to hospitals, especially those whose mission it is to serve patients regardless of ability to pay. And it will lower us in the rankings of best places to do business by the conservative Beacon Hill Institute.
The argument that this cut will keep from burdening taxpayers isn’t very honest. It doesn’t consider the fact that all health insurance premium payers will have to eventually foot the bill for these folks, since it is against federal law to deny treatment to someone in an emergency room if they can’t pay. But that’s beside the point. We can choose to live in a state where ratepayers pay the costs of this medical care, even though it will be more expensive than if the government provided it.
We can cut aid to local governments, and since local governments are reluctant to freeze pay or cut government employee benefits, they are left with cutting services like street repair or park maintenance, possibly even police or fire protection. That may impact our rate of crime, another measure of business competitiveness and livability by Beacon Hill.
We can cut another major state expense by reducing funding to K-12 education. But we shouldn’t expect class sizes that are conducive to getting the most bang for our education buck. In fact, even in the last few years, class sizes have grown despite a relatively stable budget, because of the way education is funded. Fewer students means less funding, even though fixed costs remain high and continue to grow.
Already, the basic things taxpayers expect their money to be used for — like adequate roads — have deteriorated some as a result of a very popular cut in vehicle registration fees by then-Gov. Jesse Ventura. Since we haven’t reinstated those fees, the governor’s own dashboards for road conditions have been below goals in many areas for years. That’s despite historic increases in funding. Is this a policy we want to keep in this state?
These kinds of arguments are often rejected by those who say we can just cut wasteful state spending. Even if some of that were true, there isn’t anywhere near the amount of savings to make up for the huge budget shortfall before us. Circumstances are radically different now with tax revenues plummeting. It’s not a matter of cutting waste; it’s a matter focusing spending on our priorities.
We are in great need to answer the central question before us and in the years ahead. The real question the governor should be asking Minnesotans is: What kind of state do we want and how much are we willing to pay as individual citizens to achieve it?
