Minnesota Majority - Standing Together for Traditional Values

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Posted by: Dan McGrath	12/1/2008
Minnesota’s legislature reconvenes in January. One of the first problems lawmakers are likely to face is a huge deficit, moving forward into the next budget biennium. The official economic forecast is due to be released on Thursday, but early indications are it will paint a less than rosy picture. The state government will likely face a deficit of over $4 billion dollars. In 2008, legislators withdrew $500 million from the reserve fund to help close a $1 billion deficit, leaving only $153 million in reserve account. Borrowing covered the rest of the budget gap, but the bonding bill wasn’t limited to covering essentials. Another $500 million was also borrowed for additional capital project expenditures. Speaker Kelliher has given a preview of her ideas to close the deficit, saying if it’s too large, it’s difficult to do it just by cuts. The unspoken phrase is tax increases. The economic problems that have, in part, led to the budget shortfall are the same situations that are sensitive to tax hikes. Unemployment has reached 6% in Minnesota, and is likely to rise further in the near future. Corporate profits are declining, incomes aren’t growing, sales are down and investments are failing. Higher taxes can exacerbate all of these economic conditions. The state’s Constitution requires a balanced budget each biennium. Faced with such a huge deficit, many legislators are likely to turn to tax increases as a way to cover the government’s budget shortfall. Bonding isn’t practical in our current economic situation. Speaker Kelliher continues to talk about additional “investing” in education and state infrastructure improvements, implying yet more proposals for new spending in the face of a whopping $4 billion deficit. When many families face increased economic hardship, reduced income, investment losses, loss of home equity and cost of living inflation, state government looks likely to attempt increasing the taxpayer’s burden. In the run-up to this year’s election, Governor Pawlenty, aware of a looming deficit (expected at the time to weigh in at around $2 billion), made several statements about the need for the state to live within its means, which may indicate a willingness to veto the tax increases that are likely to come across his desk in 2009. Several candidates for the state’s House of Representatives also promised to put spending cuts ahead of tax increases by signing the Live Within Our Means Commitment. This commitment will soon be put to the test and there are many legislators who have not made this commitment to the taxpayer at all. It will be of supreme importance that Minnesota’s lawmakers hear from their constituents on the upcoming budget issues. Minnesota’s economy can’t afford higher taxes right now. It’s time to take a hard look at reversing the trend of bloated government spending. Take Action: Click here to contact your representatives and remind them not to make matters worse with tax hikes when we can least afford them.

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Comments (3) Add Comment

Re: 2010-2011 Budget Deficit Looming

By Barb on 12/31/2008

Sure brings back the words said not too long ago by the Larry Pogemiller stating "the people believe we (the government) can spend their money better!" Well, excuse me? And who are "the people", and why not take "the people" you speak of, their income. You must know who "the people" are. It definitely isn't ALL OF US so keep our money out of "the people's pockets who think you can spend THEIR money better." TAKE FROM THEM. Your record shows you have NO CLUE ON SPENDING/ BUDGETTING.

Re: Huge Budget Deficit Looming	By herb on 12/17/2008
With all the tax cuts and deregulation you'd think our economy would be in trouble. I sure hope we don't go back to the highly progressive rates of the 40's and 50's when we were building roads,bridges and colleges like there was a real future in investing in MN.

Re: Huge Budget Deficit Looming

By John Brogger on 12/17/2008

It is amazing to see how many, who should surely know better, support the tax and tax and tax and tax mentality. They THINK that they can defy history and economics and because they are “so brilliant” they just “know” that they can make it work this time.
IF they are so ignorant as to add even more of a burden on the backs of the productive, they will soon discover the depths of their folly.
If you think the “great depression” was “something else”, just wait to see what their folly will spawn this time.
HOWEVER, we can be sure that they will do everything they can to not only support their voting base, but to expand that base by handing out even more “free” goodies to the professionally unemployed and the criminal element of the invasion forces. ( "those lovely people who are only trying to better themselves").
I could give a rather long explanation of the problem we are in, but I will just summerize it with this: When the dependant class reaches a point where the productive class can no longer support them, then a total collapse of the economy is inevitable.
Are the “progressive liberals” so ignorant that they are incapable of understanding that law of economics, or is it their intent to bring this nation down to total ruin?

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