How to do some real good with $8 billion

Eight billion dollars — the surplus announced in the state's latest budget forecast for the 2022-23 biennium — is an epic amount of money. We should use it to make an epic difference in the lives of the people of Minnesota.

The two most dangerous words in thinking about what the state should do with this massive surplus it announced last week are "fully fund."

"Fully fund" is code for spending more on what we are already doing. If all we do is fully fund what is already being done, we will be left with a more expensive government — but not necessarily a better or more effective one.

We have been spending more and more for decades, on health care without people actually getting healthier and on education without improving learning outcomes. And every dollar that is spent on those programs has powerful interests that will go all out to preserve what they have and get more, regardless of the outcome.

But these forecast surplus dollars — these billions — are not yet spoken for. No one has a claim on them — yet. And the amounts are huge. The $7.746 billion that the state reported is equivalent to adding 15% to its general fund. It is equivalent to adding a third to what we already spend on schools, an additional half to what we already spend on health and human services, doubling what we spend on higher education or tripling our spending on public safety.

And that is just the start. The state's forecast says that these resources will keep coming in the years to come.

Resources on this scale could be used to:

Achieving these things and more may sound impossible to many. We have been trying to do them for decades with little success. So how could it happen?

By using the money differently.

We got a COVID vaccine faster than anyone believed possible because the government did not do it the way it always had done things before. The government challenged everyone to break the rules. They did. It worked.

Taking a lesson from that success, we should use these new resources to generate these breakthrough solutions:

1. Put this money in a separate fund — call it the Breakthrough Fund or the Moonshot Fund or the Make a Lasting Difference Fund or the Changing Lives Fund. The key is to remove these funds from the process by which we have always budgeted and spent state money before.

2. Use the fund to issue challenges to make a lasting difference, to change lives. Each challenge would define what outcome we want (e.g., eliminate learning gaps or reduce greenhouse gases) and then invite all comers to bring their best, evidence-backed proposals for delivering that result.

They would have to show what they would do, for whom, how, where, when and with what result. The state would specify up front how much it is willing to pay to get the result and contract with one or more providers to do so. Their payments would be tied to the results they actually deliver.

The challenges should be open to everyone: governments and government agencies, nonprofits, businesses, community groups. Everyone. The state should contract with whoever can deliver the results most effectively.

3. Set up a small staff from the state budget office to develop each challenge, assemble the evidence from around the country and the world about what works best, evaluate the responses, and manage the contracts. Add in support from the legislative auditor to provide evaluation of the results.

4. Set up a governing body made up of people from the governor's office and the Legislature but with a majority of members from outside of government. Provide the board with the maximum flexibility for how they use the funds but with strict accountability for achieving results.

With $5-8 billion in these challenge funds continuing to come in, we could do multiple challenges every year.

The old and tired debate over cutting taxes vs. spending more, as we always have, is already raging. Doing either would waste a once in a lifetime opportunity. Instead, we can leverage these extraordinary resources to challenge and engage the whole state to find and deliver breakthroughs that will make a difference — that will change lives. We've got the money, let's get it done.

Peter Hutchinson is a former superintendent of the Minneapolis Public Schools and state commissioner of finance.