The state budget deficit announced Thursday -- $5.9 billion if inflation is counted, $5.2 billion if not -- is the state finance equivalent of last year's Interstate 35W bridge collapse. It's no overstatement to borrow the words Gov. Tim Pawlenty memorably used on Aug. 1, 2007: The state budget has fallen into a crisis of "historic proportions."
Yes, Minnesota has had revenue shortfalls before. The one the state weathered in 2003 was about this size. But this one comes in the context of a recession that state economist Tom Stinson said looks to be deeper, longer and more destructive than any since 1980-82 -- and might be worse than that frightful time.
It also comes in the context of the leanest decade for Minnesota government in a half-century. State and local government growth has slowed dramatically on Pawlenty's watch. State and local government spending per $1,000 of personal income fell below the U.S. average in 2006, for what may be the first time in the post-war era.
Those things combine to make this a crisis that will test the mettle of a whole generation of Minnesotans. They've had the luxury of being reapers of the prosperity sown in this state by forebears who invested wisely in the building blocks of a strong economy -- education, infrastructure, public safety, a clean environment.
This recession and the deficit it has spawned serves notice: The harvest is coming to a close. The state's future prosperity may rest as much, if not more, on decisions made in the next few years as on all that has gone before.
The come-together attitude the Republican governor and DFL legislative leaders displayed only too briefly on Aug. 2, 2007, as they surveyed the wreckage of a major bridge, is what Minnesotans should see from them now. Resetting the state budget at a smaller level without doing lasting damage will require levels of creativity, cooperation and compromise that go far beyond the norm.
Some of that spirit was in evidence yesterday. Both the governor and DFL leaders expressed willingness to work together. Both sides are interested in zero-based budgeting and a rigorous reprioritization of state spending. Both said they believe cost savings can come from improvements in the way government services are delivered. But differences remain: DFLers said every budget-balancing tool, including a tax increase, needs consideration now. Pawlenty said his goal is "making sure we don't raise taxes as part of this process."
To those two positions, we think the proper response for now is "You're both right." Avoiding a tax increase, especially now, is a worthy goal. Finding ways to deliver services more efficiently must be a priority now. Fresh ideas for doing so should be summoned. House Speaker Margaret Anderson Kelliher made her own analogy to the 35W bridge collapse: "This is a time when people need to actually run toward the Capitol, and bring their best ideas" for wise spending.
But it's much too early in a recession Stinson called "just plain ugly" to take any budget remedies off the table. Pawlenty and legislators should keep their options open, and their eyes on the future they want for Minnesota when the recession finally ends.