[Winona Online Democracy]
>Please read this article from the Star
Tribune on Governor Pawlenty's
>current budget revisions. As you are trying to resolve local budget
issues
>this should give you insight into the problem we are facing in St.
Paul.
> Rep. Gene Pelowski
>
>Jay Kiedrowski And John Gunyou: Budget 'solution' is nothing of the
sort
>Jay Kiedrowski And John Gunyou
>
>March 15, 2004 GUNYOU0315
>
>Gov. Tim Pawlenty recently released his budget revisions to meet
the
>state's latest $160 million shortfall. Unfortunately, this year's
plan is
>much like last year's budget: deceptive and shortsighted.
>
>As former Minnesota finance commissioners, we are concerned about
our
>state's fiscal leadership and financial future. Here's why:
>
>A year ago in his inaugural State of the State message, Pawlenty
called
>for the necessary "sacrifice to build a brighter future."
His first budget
>echoed that theme: "Tough choices today for a better future
tomorrow." It
>was, and still is, the right message.
>
>Unfortunately, the governor and Legislature didn't walk the talk. In
fact,
>they keep doing the opposite. They continue to use accounting
shifts,
>gimmicks and ill-advised spending reductions that undermine our
fiscal
>stability. They also blindly stick to their no-new-taxes pledge,
rather
>than wisely investing in Minnesota's economic future.
>
>Last year's "solution" drained the reserves, froze funding
for the next
>four years, and ignored future commitments. Then Pawlenty and
the
>Legislature falsely claimed a balanced budget by counting inflation
for
>future revenues, but ignoring it for future costs.
>
>The governor's latest budget revisions continue the charade. About
70
>percent of his fix temporarily patches things together for one more
year.
>For example, he:
>
>* Accelerates $35 million in sales taxes on auto leases, which is
better
>known as a one-time shift.
>
>* Uses transfers and one-time funds for another $76 million of the
"solution."
>
>We raise these concerns as finance professionals who have served in
DFL
>(Perpich) and Republican (Carlson) administrations. Although we
served
>governors with differing political philosophies and personal styles,
we
>are both fiscal conservatives. Actually, that's a prerequisite for
the job
>we shared -- the finance commissioner is responsible for ensuring
the
>financial health and integrity of our state.
>
>Our governors helped Minnesota responsibly weather fiscal crises, and
also
>manage through times of plenty. They did this by putting into place,
and
>consistently respecting, the reforms and practices necessary to
secure our
>state's financial future.
>
>Most notably, our administrations extended the financial
management
>horizon to ensure that transiently popular political decisions would
not
>jeopardize our state's long-term financial health. Our governors
demanded
>responsible budget reserves to protect essential services against
economic
>downturns, and they enacted landmark tax reforms to increase
>accountability and improve Minnesota's business climate.
>
>In contrast, the Pawlenty administration lost our coveted
"AAA" credit
>rating last year by replacing our state's long history of
responsible
>financial stewardship with shortsighted shifts and gimmicks.
>
>The governor and Legislature keep maintaining that they
"solved" the
>crisis without raising taxes. In truth, we still face a $1 billion
deficit
>after this fall's elections. In other words, they didn't fix the
problem.
>
>Even though they froze spending, and assumed that revenues would grow
far
>faster than costs, the shortfall between ongoing revenue and
ongoing
>spending remains:
>
>Pawlenty's latest revisions plug the 2005 hole mainly with one-time
fixes,
>so they barely make a dent in the next two years. The state would
still be
>spending $1.4 million more a day than it would collect in
revenue.
>
>We call on members of the Legislature to reject the governor's
proposals,
>and instead enact a permanent solution to fix the state's
structural
>budget problem. They can either permanently reduce spending by
$340
>million, or roll back their past tax cuts. Both would truly balance
the
>current budget, and would significantly reduce the remaining
budget
>problem for 2005-07.
>
>Pawlenty did preserve the budget reserve, for which he should
be
>commended. The Legislature must do the same. There is
considerable
>uncertainty in the latest forecast, and the rainy day fund needs to
be
>retained.
>
>In addition to solving the state's structural financial problems,
we
>believe the governor and Legislature should also reassess their
>priorities. Their quest for lower taxes should not supplant
Minnesota's
>150-year tradition of nurturing a highly educated workforce as
our
>competitive economic advantage to grow Minnesota. We offer
three
>considerations:
>
>* The state is turning its back on education. The state budget
actually
>reduces spending for E-12 and higher education for the next three
years.
>In his latest proposal, Pawlenty cuts higher education spending by
another
>$20 million, and doesn't reverse any of the planned E-12 education
cuts.
>
>* Education is a sound investment. States with higher taxes grew
the
>fastest in the past decade -- arguably because they invested
those
>resources in education. In addition, our region's Federal
Reserve
>economist recently documented that investments in early childhood
programs
>generate returns that business executives would envy.
>
>* We can afford to invest in education. The state's official
"Price of
>Government" (total revenue as a share of personal income) has
actually
>declined over the past decade. That means state and local taxes
were
>already dropping as a percentage of Minnesota's economic product,
even
>before the "no-new-tax" pledges were imposed.
>
>We believe that Minnesota needs to invest in its future. We need to
return
>to the moderate fiscal and economic strategies that have served us so
well
>throughout the past century and a half. We need to structurally
balance
>the budget, recapture our "AAA" credit rating, and invest
in our
>workforce.
>
>With highly educated entrepreneurs and workers, Minnesota can compete
with
>any state or country in the world. Investing in education translates
into
>strong economic growth, which in turn, generates the tax revenue
that
>supports essential public services.
>
>As former commissioners of finance, we always believed it was our
duty to
>help our governors leave Minnesota in a better condition than when
we
>arrived. The financial and economic policies of the Pawlenty
>administration will not result in that stronger, more competitive
future.
>
>We believe that Minnesota's next generation deserves better.
>
>Jay Kiedrowski is an executive vice president for Wells Fargo and
Co., and
>John Gunyou is Minnetonka's city manager.
_______________________________________________
This message was posted to Winona Online Democracy
All messages must be signed by the senders actual name.
No commercial solicitations are allowed on this list.
To manage your subscription or view the message archives, please visit
http://mapnp.mnforum.org/mailman/listinfo/winona
Any problems or suggestions can be directed to
mailto:[EMAIL PROTECTED]
If you want help on how to contact elected officials, go to the Contact page at
http://www.winonaonlinedemocracy.org
