Crisis is not too strong a word to describe the situation that confronts the 2010 Legislature as it convenes Thursday in St. Paul. Not since the dark days of the 1930s have state and local government's financial prospects, short and long term, been dimmer.
And not since the politically volatile 1930s and 1940s have Minnesotans had more reason to doubt their political system's capacity for wise response. The past decade produced recurring budget shortfalls, one government shutdown, unfinished business and unilateral budget cuts by an uncompromising governor -- all traceable at least in part to partisan polarization in St. Paul. Seldom did Minnesotans see their elected leaders come together to serve the common good.
That pattern urgently needs to change. A $1.2 billion deficit in a biennial budget that's already a quarter spent demands quick remedy. It won't wait for the next election, or for another Washington bailout, to be set right. It ought not get kicked down the road with accounting gimmicks. The 2010 Legislature and Gov. Tim Pawlenty own this problem, and they owe it to Minnesota to cooperatively craft a lasting solution.
Lawmakers dare not approach the budget deficit as simply a subtraction problem. It's their duty to balance the state's currently depleted means with its present and future needs. They must evaluate what public investments provide the greatest return, in terms of prosperity and quality of life, and find a way to shield those investments. They should be open to selectively raising revenue, with an eye toward those tax increases that would cause the least drag on a halting economic recovery.
They need to do so mindful of Minnesota's competitive position. This state's late 20th-century prosperity made it a standout among Midwestern states. Evidence is accumulating that the Minnesota edge dulled in the past decade. A report issued last week by the progressive think tank Minnesota 2020 found slippage in the state's position relative to other states in personal income, unemployment, educational achievement, transportation infrastructure and more, all since 2002.
It's notable that during that time, Minnesota's state and local government revenues and spending also fell from above average, where they had been for more than a half-century, to at or near the average for U.S. states. Lawmakers need to honestly evaluate whether average-sized state and local governments can do their part to enable the above-average economic performance Minnesotans have come to expect.
State government's primary responsibility is to create an environment conducive to prosperity in the long term. But it is not without some ability to affect job growth in the near term. The Legislature and Gov. Tim Pawlenty are obliged to do what they can to generate jobs this year.
Early enactment of a bonding bill at least as large as the $725 million included in the state's fiscal forecasts is mandatory this session. The discount that's now available in construction costs justifies a bill larger than the $685 million Pawlenty proposed. Several times in the past decade, bonding bills stalled for partisan and often petty reasons. Minnesotans should tolerate no bonding bill gamesmanship this year. This state needs both the construction jobs it can finance beginning this spring, and the infrastructure improvements it will bring for the future.
Business investment incentives that have broad bipartisan support also should move quickly to enactment. A number of good ideas -- chief among them a 25 percent tax credit for "angel" investment in small high-tech or green-economy enterprises -- were advanced last week by House tax chair Ann Lenczewski, DFL-Bloomington.
In past sessions, small probusiness tax measures have been included in omnibus tax-raising bills that legislators knew were bound for gubernatorial vetoes. This session, those measures should land on the governor's desk with no veto bait attached.
These aren't easy times to govern -- not least because restive hard-line factions within both big political parties are flexing their muscles in this election year. What the state's elected officials ought to hear from voters is that they want bipartisan governance this year, and they stand ready to reward in November those who provide it.