Local lawmakers cautious about projected surplus

Morrow: ‘I don’t think this means a spending free-for-all’

By Mark Fischenich

After five years of state budget forecasts that ranged from gut-wrenching deficits to tiny surpluses, newly elected lawmakers got a big dose of good news from the forecast released Wednesday.

“The word spread around the building pretty quickly,” said Rep.-elect Terry Morrow, DFL-St. Peter, who was with other new members of the House and Senate for an orientation and retreat. “... There were a lot of smiling faces up here.”

And there were a lot of organizations immediately sending out press releases saying essentially the same thing: Don’t forget about us when you decide what to do with all that extra money. Advocates for government employees, children, schools and business all had ideas about where at least some of the money should be directed.

Morrow said the surplus is likely to benefit some of the key pieces of the state budget that were consistently a focus of candidates statewide in the fall campaign. They include spending for education, health care and tuition assistance.

“At the same time, I don’t think this means a spending free-for-all,” said Morrow, who predicts that property tax relief is a very likely target for much of the surplus.

Rep.-elect Kathy Brynaert, DFL-Mankato, cautioned lawmakers and Minnesotans in general to not let their expectations get out of hand.

“In the campaigns, a lot of people had spent that surplus 10 times over,” Brynaert said.

The first $1 billion of the surplus is for the current fiscal year and can’t be spent on programs that have an ongoing cost beyond June 30. The remainder of the surplus is for the upcoming two-year budget period that begins July 1, but much of that could be eaten up by the impact of inflation on a state budget that totals more than $30 billion.

In addition, Brynaert said, a constitutional amendment approved by voters on Nov. 7 will ultimately shift $300 million a year from the state’s general fund to highway and transit funding. So some of the surplus money will also need to replace the transportation funding simply to keep general fund programs funded at current levels.

If money is available for spending, Brynaert would like to see it concentrated on education — including early childhood programs, K-12 schools and colleges — along with health care and possibly environmental initiatives to protect wildlife habitat and water quality. And even with passage of the transportation amendment, more money needs to be invested in roads, she said.

Sen.-elect Kathy Sheran, DFL-Mankato, had similar words of caution. Just as the transportation amendment might leave people thinking the state’s road problems are solved, news of a surplus might give the inaccurate perception that difficult choices won’t be needed.

“While a surplus is always better news than a deficit, it has the potential to create a false perception,” Sheran said.

She listed similar priorities as Morrow and Brynaert for any available money, and agreed with them that a good chunk of the surplus is likely to be aimed at property tax relief.

“That was huge in rural Minnesota elections, the shifts that were made to property taxes in K-12 education,” Sheran said.

Rep. Tony Cornish, R-Vernon Center, promised that Republicans in the Legislature — who had a difficult election and are now in the minority in the House and Senate — will be watching the Democrats closely.

“We’re worried that people will be so anxious to spend it that it won’t be spent wisely,” Cornish said.

Like the Democrats, Cornish sees property tax relief as a crucial need. But he would be more likely to support direct relief to taxpayers rather than giving more funding to schools, cities and counties as a way to help them to reduce property taxes.