At your State Legislature, it has been an interesting couple of weeks. First, we learned Minnesota’s budget deficit grew by more than a billion dollars (from $4.8 billion to $6.3 billion). That’s not quite as bad as many had predicted, but it is a record deficit for Minnesota, and it underscores the need for us to get to work. Majority leadership has now spent nearly half of this session getting virtually nothing done that will help balance the state budget – our number one priority this session. Instead, committees have spent countless hours listening to various briefings and reports, and hearing bills that do little to help balance the budget. Each day, Minnesota is spending $3 million more than it takes in, and we need leadership willing to grapple with the tough decisions necessary to balance our budget without increasing the burden on already stressed families and businesses.
Which leads to the second point of interest. Senate DFL leaders this week announced what many of us have been expecting: They want to raise taxes $2 billion, mostly on businesses and those who invest to create jobs. They also want to cut K-12 education funding by more than $1 billion. While I give them credit for finally coming forward with something, this approach demonstrates poor judgment in the midst of a deep recession. We need to help businesses grow good paying jobs, not add insult to injury by raising taxes. State Economist, Tom Stinson, stated clearly that increasing taxes on businesses and job creators would "not be helpful" to Minnesota's economic recovery. While I remain a strong proponent of better outcomes in education, given the $14,000 we spend per K-12 pupil (all funds), and expanding the dialogue beyond only funding, I do not believe cutting K-12 spending by $1 billion is wise.
I have authored and co-authored several pieces of legislation that would help state government live within its means, just like the rest of us:
* Freezing state spending at the current level, or the amount of revenue we are taking in, whichever is less. By itself, this would get us most of the way toward balancing the budget. Keep in mind, when people talk about “cuts” in state spending, they’re usually describing less of an increase -- not actual cuts. The truth is, Minnesota’s budget has not experienced a literal decrease in more than three generations, and in recent decades it has grown an average of 11 percent per year – much more than inflation or people’s wages.
* Freezing state employee wages so we live within our means and preserve jobs (instead of cutting jobs).
* Officially, in legislation and across-the-board, cutting legislators' wages and reimbursements.
* Reducing the compensation of all state employees making $100,000 or more by 5%.
* Cracking down on welfare fraud to preserve aid for those who really need it. It is estimated 15% of our welfare dollars are eaten up byfraud, costing Minnesotans more than $1 billion each year. Some of my colleagues on the other side of the aisle argue there is no significant welfare fraud, but at a recent briefing with welfare fraud investigators, and in meetings with county social service workers, we have heard dozens of examples of welfare fraud and abuse. Welfare fraud prevention should be an issue with strong, bi-partisan support!
This coming week, I will introduce legislation that would continue coverage for adults on MinnesotaCare through a consumer-driven, market-based solution that would provide better coverage, better payments to providers, and save the state as much as $100 million.
I will also offer a reasonable prevailing wage reform bill that would bring Minnesota in line with other states, saving taxpayers $100 million per bonding cycle, allowing us to create more jobs with those dollars, and repair more roads, bridges and buildings. It is imperative we make the most of our available state funds, especially as Minnesota faces a $6.3 billion deficit.
One way we can help local governments put taxpayer dollars to better use is by providing them with the flexibility they need to tailor their budgets. I have co-authored a local mandates reform bill (HF1195) brought forward by a bi-partisan working group. If approved, it will help local units of government by repealing some state-imposed mandates that add costs to local taxpayers. The bill passed in our Bioscience and Workforce Development Policy and Oversight Committee last week.
Mandates handcuff local governments by dictating how much money must be spent in particular areas. This is especially troublesome when local governments are told they must maintain certain spending levels, even if they are operating with smaller budgets due to the recession. Because of the deficit, Minnesota has had to cut Local Government Aid (LGA) payments to cities, including our own here in District 15A. As we remove state aid, it makes common sense to allow cities the flexibility to do what they and their residents decide is best at the local level.
Two somewhat controversial elements of the bill include its allowance for lifting of local levy limits, and its allowance for discontinuing truth in taxation hearings (which the working group felt were both costly and ineffective). Instead, it encourages local governments to find more meaningful ways to involve residents in local budgeting and spending decisions.
HF1195 also establishes a Legislative Commission on Mandate Reform to continue the discipline of reviewing and reforming state mandates on local units of government. It's not another permanent piece of bureaucracy either, since the commission would expire in 2013.
An interesting and sobering statistic regarding the recently passed federal deficit spending package of more than $700 billion: It amounts to about $2,600 debt for every man, woman and child in this nation. That's on top of the previous spending packages designed to jump start our economy. We cannot continue living beyond our means with money we do not have -- privately, or in government! That is precisely what got us in trouble in the first place. When you're in a hole, the first thing you need to do is stop digging. It's time to cut spending, and live within our means.
This week, I will also announce another series of Town Hall meetings to gather your ideas, concerns, input and feedback. It is an honor and privilege to serve as your State Representative, and I urge you to continue letting me know how I can help. As we enjoy the return of warm weather, I wish you and yours the very best in this first week of spring. You can contact toll-free at 1-800-683-0886.
Sincerely in service,
Rep. Steve Gottwalt
House District 15A
St. Cloud, Waite Park, St. Augusta and Rockville