Our Viewpoint on the Bond Borrowing Bill

02/24/2005

Paul Munnis

We have a structural imbalance in the budget of our State and it’s still not resolved. People want to argue about the numbers but we can agree it’s in the range of three quarter of a billion to $1.4 billion.

Our legislators have hugged each other and embraced a Bonding Bill that rushes to borrow $724 Million for State capital project funding and the number is rising in the conference committee. We used to have the money for this sort of thing but the GOP raided it all. Anybody remember the tobacco tax settlement money? Now we have to go and borrow money and pay it back at interest to get capital improvements. Voters are supposed to be happy about this. I’m not.

In addition to solving the structural imbalance in the budget, the legislators need to get a fund that the GOP can’t raid. It needs to be dedicated for capital improvements. We will always need to fund the rebuilding or expansion of a sewer district, we will always need to build a new campus building, we will always need to fund road improvements and bridge building, and we will always need to do public works projects that create new jobs for Minnesotans. Yes, we will always need to maintain the Minnesota Zoo. If it’s a capital building project need and it’s a capital building fund then legislators should be free to allocate the money from the fund as needed.

When legislators are dancing a “No New Taxes Pledge” and just grab the money and run with it to cover up their own unwillingness to do what it takes to balance the budget then we say: “Hands off Buddy.”

There is a time to borrow however. When a capital improvement is needed such that the revenue from the investment can be dedicated to bond payback and be assured by the sponsoring agency and they can show proofs of this then we think there should be a freedom to Bond. For example: if a new bridge is to be built and a loan of $50 million is to be made to pay for it and it’s a toll bridge with a five year break-even then by all means borrow. But to borrow money to repair roads that are deteriorating faster than you can fix them with borrowed money and then to have to pay the interest from general revenues too, that’s simply irresponsible government.

What’s done is done. This Rochester citizen isn’t going to demand that we give the money back. But I think it is right to demand that we learn from our mistakes and don’t institutionalize them as a way of fiscal life. Borrow and spend Republicans are something to be feared in the fiscal scheme of things. They point to a budget surplus as proof of over-taxation then run to the money lenders when a capital improvement is needed. In our opinion that’s just not right and we think it hurts taxpayers and to see how much, just look at the amount of interest that we must pay because of their policies.

These days when State Governors get on their soap box and talk about how they have to balance the budget in their State, we just chuckle and wonder whatever happened to telling the truth. Minnesota hasn’t had a balanced budget since the GOP got into the Governor’s office.