Politics in Minnesota’s Steve Perry runs down what the numbers will look like without this year’s one-time stimulus money and education shift. After one-time money and accounting shifts this year, we only (only!) had to come up with $2.1 billion in this biennium. In 2012, we presumably will not have help from the Federal government. Plus, we will need to pay back the education shift that we so wisely used in this biennium. The result:
- In sheer inflation-adjusted dollars, the $7.3 billion ‘12-‘13 deficit is equal to 3.5 times the net $2.1 billion hole that the Legislature and the governor had to make up this year for ‘10-‘11.
- As a share of the prior biennium’s collections and expenditures, the projected 24 percent ‘12-‘13 shortfall is equal to 4 times the net 6 percent ‘10-‘11 deficit.
Once again, this is why we shouldn’t rely on one-time money or accounting shifts to “balance” the budget. Because it’s not balancing the budget, it’s just kicking the can down the road. Our policymakers — including, but not limited to, Governor Pawlenty — should be ashamed of themselves for allowing this to happen.
How do we avoid turning into California in the next five years? We don’t have the expanded tax base or the population that California does. Is there enough money in the state that can pay for all this stuff? Or, will the cuts have to continue?
I don’t know the answer. I think the easy answer - raising taxes on the people who make the most - could funnel more folks out of this state. Unfortunately, the people who make the money are the ones with mobility to take their money out of here.
Another answer - raising business taxes - could lead to the same result, jobs leaving the state and the tax base constricting.
Honestly, I don’t know the answer to solving a crunch like this.
Typical ideological responses — the wealthy will leave, the businesses will leave. Bull. All I have to say is if taxes are so important to their button line then we don’t need them, they should leave and setup shop in, oh lets say South Dakota, see how they like it there. If their profitability and mission is dependent on a race to the bottom, fine, let them setup shop somewhere else, they can suck them dry there instead of here.
When you look at the numbers, things just seem worse and worse. Borrowing money to pay a debt has never worked for me, why would it work for anything else?