Spending spree busted the budget? Go figure.

DFL made historic surplus go poof. Now facts must be faced.

By Jim Schultz

December 13, 2023 at 11:45PM
The Minnesota State Capitol building in St. Paul. (Anthony Soufflé, Star Tribune file/The Minnesota Star Tribune)

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Political jargon is the enemy of informed public opinion. Winston Churchill, whose wartime leadership against Adolf Hitler saved Britain and maybe the world, also warred against jargon. Bemoaning bureaucrats who took to calling the poor the "lower income group" and homes "accommodation units," he mused, "I don't know how we are to sing our old song 'Home Sweet Home.' 'Accommodation Unit, Sweet Accommodation Unit, there's no place like our Accommodation Unit.'"

Some things never change. Minnesotans were told last week by the state's leadership that in a few years the state budget will come up $2.3 billion short. But, they explained, although future spending will exceed revenue, this isn't necessarily a deficit. Rather, it's a "structural imbalance."

Let's describe where we are in jargon-free terms: The most hard-left Legislature in Minnesota history went on a spending spree unlike anything the state has ever seen. Those who warned about future deficits were ignored. And now we're about to come up a couple billion dollars short. But what's a couple billion dollars among friends?

Just last year the state, flush with COVID-related cash from the federal government and a previously robust national economy, enjoyed the largest budget surplus in state history. At $19 billion, the biennial surplus was larger than the full annual budgets of 17 U.S. states.

With such an immense surplus, state leaders could have held fast to campaign promises to deliver meaningful tax rebate checks and still have plenty of money to spare for long-term tax relief.

Instead, they broke their election-year promises and the state's "progressive" leadership raised taxes by $10 billion and issued small rebate checks to some Minnesotans. Then they increased general fund spending nearly 40%.

Notable in the state's new spending commitments is the reconstruction of our State Office Building. The $730 million price tag for this project, including interest, approaches the cost of the Minnesota Vikings' stadium. For another comparison, that amount could purchase the largest two buildings in downtown Minneapolis. Or, the amount spent on this one government building is more than double the amount appropriated last session for cities to address police shortages and increases in violent crime. As I write, there is a memorial to this folly in the now-desolate wasteland adjacent to the existing State Office Building where dozens of huge trees have been clear cut to make room to massively increase the size of the building. This project is, in jargon-free terms, absurd.

Another absurdity contributing to our future deficit is the $200 million spent for a train to Duluth. It seems relevant to any discussion of a rail project that few people ride the rail the state currently has. Also relevant is that the new rail we are currently building — the 14-mile track known as the Southwest light rail — is $1 billion over budget and a decade late. Add to this the fact that the Duluth train will deliver Minnesotans to and from Duluth in the same amount of time as a car, and at a higher cost, and we have a new entry in Webster's for the definition of frivolous spending.

Remarkable waste in our state government is helping lead us to massive future deficits. That we have come to this point is not surprising. As the Star Tribune's Evan Ramstad has pointed out, the Minnesota economy is growing more slowly than at any time in its history. But despite this lackluster economic growth, our government has grown at historic rates. Since 2010 our economy has grown by just 22%, but far-left governance has grown our budget by a stunning 130%.

No amount of jargon can conceal that the math doesn't add up. As we approach the coming deficit, the response of those now governing the state will be to raise taxes yet again. This would be a huge mistake given that the state is already the fifth-highest taxed state in the nation and that jobs, people and investment are fleeing our state in part due to the state's ever-increasing tax burdens.

The answer to the coming budget deficit is to institute responsible spending reform alongside tax and regulatory reform that can generate jobs, grow wages, and attract people and businesses to the state. It is a path well-trodden over the last decade by states as diverse as Arizona, North Carolina, New Hampshire, Iowa and Michigan.

The same far-left politicians who squandered a $19 billion surplus and created a massive deficit will certainly oppose such common-sense reforms. If they succeed and "solve" our deficits with yet more taxes, countless more Minnesota businesses and Minnesotans will seek out "accommodation units" in other states, and we will have planted the seeds for future "structural imbalances." We must reject that path.

Jim Schultz is the president of the Minnesota Private Business Council.

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about the writer

Jim Schultz

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