Election ‘06 issues: The state budget

10/25/2006

Dane Smith,
Star Tribune
Last update: October 24, 2006 – 10:52 PM

When Minnesota’s governor is inaugurated in early January, he may have close to a billion dollars in projected surplus revenues to work with as he assembles a two-year budget proposal of about $33 billion.
That surplus amounts to less than 2 percent of the budget and probably won’t be enough to fulfill all the promises that the three major-party candidates have been making.

In varying degrees of specificity and scale, the candidates have been telling voters that they will put more money into K-12 education, early childhood education, higher education, highways and mass transit, expanded health-care coverage, environmental protection and renewable energy, technology and bioscience research, and improved telecommunications infrastructure.

Even without those raised expectations, the State Capitol always is besieged by demand for increases from every conceivable interest group. And that demand has been exacerbated by several years of tight budgets.

Two other hard facts complicate the situation. The state budget, unlike the federal budget, by law cannot be balanced through borrowing. And much of the forecast is not adjusted for inflation, which occurs at a higher rate for the things that government provides.

All three major-party candidates are caught in a classic political quandary. They want to demonstrate vision and offer some grand ideas for popular new public goods. But almost nobody really likes tax increases, and candidates who are frank about hikes almost always lose. So all three are loath to even hint that they might have to raise state income or sales taxes—the two big weapons in the revenue-raising toolbox and the ones that spread the burden most broadly.

Instead, each candidate has come up with a relatively painless revenue-raising scenario. They insist that hundreds of millions or even billions can be gotten—to twist a timeless phrase—without taking money from you or me, but from the guy behind the tree.

Each candidate’s solution has been dismissed by the other two—and, more important, by policy experts—as illusory and insufficient.

The skeptic’s view that in politics there is seldom taxation without misrepresentation, and that some sort of tax will be raised in the next few years, may be justified.