- Associated Press - Monday, February 29, 2016

Star Tribune, Feb. 26

Lower revenue forecast should be a caution sign for Minnesota Legislature

A new state revenue forecast Friday splashed some chilly reality on hopes for big tax cuts and/or sizable new spending from the 2016 Minnesota Legislature. While the state budget remains safely in the black, its spendable excess is down $300 million from a forecast issued just three months ago. The sum legislators have to work with through June 30, 2017, is now $900 million, compared with the $1.2 billion projected at the end of November.

A change in outlook that large and that fast should be seen by lawmakers as a big flashing “caution” signal. So should word that the forecast surplus for the coming two-year budget period is not $1.8 billion (two times $900 million) but $1.2 billion, and that’s without factoring in expected inflation in spending. When inflation is considered, the black ink on the 2018-19 bottom line turns red.

That much change stems largely from a slowdown in both national and global economic growth that’s crimping both income and sales tax collections at the state level, state economist Laura Kalambokidis explained. It’s also the consequence of a labor shortage that is tightening as baby boomers exit the workforce and is already keenly felt in parts of Minnesota.

Friday’s forecast tells us that state lawmakers should scale back any spending and tax-cutting ambitions. For example, the majority House Republicans should rethink plans for ballooning tax cuts for both businesses and Social Security recipients, and should go easy on redirecting several sales tax streams from the general fund to the state’s trunk highway fund. Each of those moves carries fiscal risk; doing both simultaneously in light of Friday’s forecast would be reckless.

Similarly, the forecast should advise Gov. Mark Dayton to throttle back his push for free preschool for all of the state’s 4-year-olds. His zeal for early education as a tool to improve lives is commendable. But preschool in every school district carries a big price tag, and likely would not produce as much gain for needy children as would the means-tested approaches Dayton signed into law last year - preschool scholarships and School Readiness grants to school districts.

Legislators are well-advised instead to favor ideas for more modest and/or nonrecurring measures that would help meet what should be the state’s top policy goal in the next decade - attracting and keeping a skilled workforce.

For example, capital investments in higher education, transit and water treatment upgrades, financed with state bonds that carry a 20-year payback, make good sense. So does one-time spending to hasten the arrival of broadband Internet service throughout the state. Tax relief aimed at young working families, such as Dayton’s proposed child care tax credit increase, would be well-timed.

Sustaining fiscal stability may not score many political points for election-minded legislators. But it’s a worthy goal for serious stewards of this state. A stable state budget is an asset that eluded Minnesota for a dozen years, from 2001 to 2013. The results were rapidly rising property taxes and college tuition, and a pinch in the services that make Minnesota an attractive place to live and work. Much would be lost if the state budget slips into the red once more. Friday’s forecast serves as a reminder of how quickly fiscal stability can erode.

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St. Paul Pioneer Press, Feb. 28

It’s one-time money, legislators

State lawmakers should return to the Minnesota Capitol next week with sharp pencils and firm resolve to resist spending that adds obligations to the budget.

Conversations with House and Senate members from St. Paul in recent weeks - and the budget and economic forecast released Friday - make clear that restraint should be a focus for lawmakers’ attention and public scrutiny this session.

The mandate to proceed cautiously with the now-$900 million projected budget surplus is increasingly compelling in light of concerns about a slow recovery and economic challenges that members of the St. Paul delegation noted in meetings with our editorial board as they prepare for the call to order on March 8.

The budget surplus is down from an earlier projection of $1.2 billion. The accompanying forecast notes a weaker U.S. economic outlook and cites three negative influences: a glut of business inventories, depressed oil-related investment and the drag on global trade from the stronger dollar. Closer to home, the forecast highlights the state’s stable budget outlook - along with indicators that include a sharp drop in global iron-ore prices leading to significant cutbacks in the state’s mining sector.

Calls for restraint we heard Friday are welcome. It makes sense, Senate Majority Leader Tom Bakk told us, to treat the surplus as one-time money that won’t recur. To the extent his colleagues do so, the Democrat from Cook said, “I think we’ll just be in a better position this time next year.” As we’ve observed:

Spending begets spending. Funding programs that increase government base spending sets us on an unsustainable path for more spending in years to come. Every dollar not spent today is a dollar-plus-inflation that doesn’t have to be spent tomorrow and the next day and the next.

The path already is steep enough. General fund spending over the last two decades - interrupted only by the impact of the Great Recession on the 2010-11 biennium - rose from less than $20 billion in 1996-97 to $41.5 billion in 2016-17.

Our history offers a valuable lesson: Tax cuts, followed by major reforms in 2001, resulted in a decade of management efforts that included accounting gimmicks and borrowing. The surplus-to-deficit scenario is one that bears not repeating.

Room to maneuver: We’ve been warned, repeatedly, about preparing for spiking demand for costly services from an aging baby-boom generation. Between 2010 and 2030, the number of people older than 65 in Minnesota is going to double; the number of those older than 85 will triple, according to the state’s Department of Human Services.

When it comes to wise ways to spend our one-time dollars, Rep. Alice Hausman, ranking Democrat on the House Capital Investment Committee and a St. Paul Democrat, is among those talking about infrastructure, “where you get a project done and it doesn’t add to the base budget in the next go-‘round.”

Such projects stand in contrast to spending, for example, for universal pre-K education, which would amount to a new commitment by the state to spend into the future.

Surplus dollars for infrastructure don’t have those long strings attached. Checking some road, bridge and other infrastructure projects off the list makes sense now and takes a burden off future spending. The projects - essential to the economic health and competitiveness of the state - deserve fair consideration.

But our conversations with lawmakers also included signals that such projects - along with the Big Three issues this session: bonding, taxes and transportation - could remain in play until a last-minute deal is made.

And there’s talk, as well, that what should be relatively simple tax-law changes needed to advance a professional soccer stadium in the Midway area of St. Paul could similarly be held up until the last days of the session.

“There has to be a better way,” the Pioneer Press’ Rachel Stassen-Berger wrote about the flurry of such closed-door deal-making that concluded the 2015 session.

It “ended with lawmakers voting on budget bills they had no time to read and little time to discuss,” she wrote, noting the misreading of bill numbers, shouting as the House speaker gaveled the session to adjournment and more.

This year, “better-way” efforts will treat this year’s so-called “surplus” for what it is: one-time money.

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The Free Press of Mankato, Feb. 27

Intolerance will be flagged by the public

If you think you can write whatever you want on social media without consequences, you should know that some people are policing what is said, including posts by police.

A Rochester officer found that out the hard way recently. The department put him on administrative leave while an investigation is done on whether he posted an image on his Facebook page of a car running over protesters and another that talked about shooting Muslims in the face.

In St. Paul, an officer resigned in February after admitting to creating a social media post urging drivers to run over protesters during a Martin Luther King Jr. Day march.

In a way the postings are a curse in that they widely distribute racist comments that could potentially drum up support for backward attitudes. On the other hand, without the postings, the officers may be able to hide their racist leanings from the greater public. In the case of the St. Paul officer, this was not some green rookie mouthing off; the sergeant worked for more than 20 years on the force.

The group Me to We Racial Healing has been responsible for alerting employers to the vitriolic language their employees are posting on social media, including the two cases of the police officers. The group’s founder, Andrea Morisette Grazzini, told MPR News: “Nobody would look at that and say ‘Gee, this officer is clearly going to respect me if he pulls me over.’”

Grazzini gets right to the heart of this disconnect between serving and protecting the public and belittling segments of the community that is supposed to be included in that protection.

That’s not to say that many officers don’t do their part to reduce racism. In Mankato we see the Department of Public Safety’s efforts to connect with the refugee and immigrant communities, including volunteering to coach kids playing soccer at playgrounds across the city. The community policing program emphasizes police connecting with the neighborhoods they serve. The department also has hired a Somali officer.

Even so, we can’t be complacent. The Facebook watchdogs aren’t only keeping tabs on public safety employees. An employee at ADM in Mankato also lost his job over racist postings. Mankato is not immune to the intolerance we are seeing elsewhere in the state.

In St. Cloud, it was a resident spotting and reporting a license plate that drew criticism of the state for allowing such a vanity plate to be displayed. Even though the plate applicant said “FMUSLMS” alluded to the name of a band, there’s no mistaking how inappropriate the state’s approval of the choice was.

Just like that alert St. Cloud resident, we need to make sure that others in our community are respecting one another. Free speech is a right that we all deserve, but not at the sacrifice of civility.


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