Needed investments can't happen without revenue. An honest solution includes it.
Minnesota Chamber of Commerce President David Olson recently mischaracterized Gov. Mark Dayton's budget in this newspaper, claiming that it contains too little reform ("Budget is swell -- for Minnesota's competition," Feb. 3).
We welcome ideas on how to balance the budget and reform government. But if "reform" is just another way to say "cut government" or "no new taxes," we won't get very far. Minnesota has tried that approach for the last 10 years, and the results aren't worth bragging about.
For more than a decade, Minnesota has spent more than it has raised, leading to chronic deficits, skyrocketing property taxes, more borrowing from our schools and prolonged fiscal instability. The chamber's unwillingness to support any new revenue as part of a balanced strategy to fix our state's budget problem is part of what got us into this mess.
Minnesotans expect reform in state government and long-overdue investments in the things that make our state great: a world-class education system, sustainable economic growth and a skilled workforce. That is exactly what the governor's budget delivers.
The budget proposes new investments in education, job creation, property tax relief, and better care for seniors and disabled Minnesotans. It pays for these new investments, and closes the $1.1 billion deficit, with an honest, straightforward solution.
But these new investments aren't possible without reforming our unfair and outdated tax system. That is why the governor is asking the richest 2 percent of Minnesotans to pay 2 percent more in income taxes.
His budget closes corporate tax loopholes for some businesses in order to cut the income tax rate for all corporations. It expands the sales tax to include more goods and services while providing the largest sales tax rate cut in Minnesota history. And it provides a $500 property tax rebate for every Minnesota homeowner.
But despite Olson's assertion, the governor's reform agenda does not begin and end with taxes. Program by program, in big and small ways, the budget helps deliver better, faster services to Minnesotans at a better price.
Take health care, for instance. This year, the Dayton administration saved taxpayers $1 billion through managed-care reform, by requiring insurance companies to compete for state health care contracts and by capping profits at 1 percent. The governor's budget delivers another $151 million in savings by reforming long-term care, thus providing more choices and better care for seniors and Minnesotans with disabilities, helping them stay in their homes.
Last week, we announced another measure that will change how the state pays for public health insurance -- an important reform that will provide better care for 100,000 Minnesotans and save taxpayers an estimated $90 million.
But Dayton isn't stopping with health care. The administration already has streamlined environmental permitting, making it faster and more predictable for businesses.
Today, 94 percent of job-creating permits are completed within 150 days. Last month, the governor built on that success, committing his administration to completing certain permits within 90 days, and he has proposed targeted investments in information technology and additional staffing to get it done.
More than that, the administration has centralized management of the state's IT systems, saving millions of dollars and improving the safety and integrity of public data. We are also comparing administrative functions of state government to best practices in the private sector to improve services and save money. And we are training state employees to reform government from the inside out.
The continuous-improvement program known as "Lean" already has trained 2,700 employees to deliver better, faster services at a better price -- saving more than $12 million over the last two years. Dayton's budget makes an additional investment that would improve the Lean program's impact significantly, saving millions more over the next two years.
Where do these cost savings show up in the budget? The state's nonpartisan budget office estimates that inflation has increased the costs of goods and services that state government buys by $1 billion over the last two years, and it projects a similar increase of $890 million over the next two. These costs are not included in the official forecast, but they are real.
The untold story of reform is how state employees are finding ways to cover cost increases through better management, new efficiencies and continuous improvement. That's real reform that adds up to almost $2 billion in savings, though it never shows up in any official forecast.
In order to fix Minnesota's broken budget, we need straightforward solutions and an honest debate about what is at stake this legislative session. Business as usual simply will not cut it this time around.
Minnesota expects and deserves a different approach. That has been Mark Dayton's commitment as governor, and it is what he is prepared to deliver in this budget.
Tina Flint Smith is chief of staff for DFL Gov. Mark Dayton.