Fiscal Frankness

Let’s say a family’s household income stays flat year-to-year. Not even a cost-of-living adjustment. At the same time, household bills for food, housing, insurance (premiums, deductibles and co-pays), utilities, transportation, child care, clothing, out-of-pocket health care and higher education increase. On top of that, the family takes on a new household member, such as a newborn, an adopted child, a foster child, a vulnerable adult relative or an elderly parent. That new household member consumes goods and services that the family didn’t consume the year before.

Under those circumstances, the family would be less well off economically than it was the year before, correct?

And so it goes with the state budget. Republican legislative leaders are holding out for a budget total of $34 billion, and they assure us that it is The Largest Minnesota Budget Ever.

But here’s the problem. That level doesn’t keep up with the year-to-year increase in expenses. Therefore, as with the hypothetical family example, Minnesotans will have significantly less than the year before.

GOP leaders aren’t shooting it straight on this issue. For instance, Mower County Republican Chair Dennis Schminke recently opined in the Austin Daily Herald:

“…the $34 billion-plus budget (that Republican legislators support) is not a cut — in fact, it is the largest budget, and largest tax burden, ever presented to Minnesota citizens and taxpayers.”

This ubiquitous Republican talking point is used to create an illusion that a $34 billion budget provides more services than ever.

It doesn’t. Again, it doesn’t keep up with the rising costs of things governments buy. Medical inflation alone — probably the biggest cost driver in the state budget — is expected to be 8.5% in 2012. Because these bills are going up, the Republican $34 billion budget will eliminate 140,000 poor people’s health coverage (shifting costs to the rest of us), hand a 12.5% tuition increase to college students and their families, and result in local governments raising property taxes on homeowners and business owners by a projected $1 billion dollars.

I could respect Republicans like Schminke if they shot it straight to Minnesotans: “Our $34 billion budget means Minnesotans will have a significantly lower service level next year, but we believe less government services is in our state’s best interest long-term.” That would be honest. But I can’t respect the persistent spin that a $34 billion 2012-13 budget does not represent a reduction in the level of service. Whether or not you support government service cuts, let’s just be honest with each other about the true implications of this debate for ordinary Minnesotans.

– Loveland