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Editorial: Foundations urge look at reform ideas

Big cuts and higher taxes aren't the only options, report says.

Last update: March 30, 2009 - 10:28 AM

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ON THE HORIZON

"Looking out to the future, we cannot see a time when we can relax and go back to business as usual."

Minneapolis Foundation president and CEO Sandra Vargas, March 25.

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Five of Minnesota's leading philanthropic foundations, always sources of hope, delivered a timely and hopeful message last week: The price of recession need not be dramatically higher taxes or a significantly weaker public sector. It's possible for Minnesotans to be served as well or better by government, without paying a lot more.

That optimistic idea is at the heart of good work on state and local government reform being done in concert by five foundations -- Bush, Northwest Area, Minneapolis, St. Paul and Minnesota Community -- along with the Citizens League and Minnesota-based Public Strategies Group, a national government consulting firm.

Their joint effort, "Minnesota's Bottom Line: Better Results for Dollars Spent," went public at a meeting Wednesday of 150 civic leaders.

They were asked to consider a set of nine proposals, not as recommendations but as starting points for statewide discussion. The set can be examined at www.citizensleague.org/bottomline.

Much of what they propose is either complicated, controversial or both. If it were easy to transform government to perform better and cost less, it would have been done already in this lean decade. The state is experiencing its second big revenue meltdown in six years; a major efficiency push, Drive to Excellence, has been at work in the Pawlenty administration for four years.

But a forecast of state revenues running 20 percent behind existing program costs in the next two years is making what formerly looked daunting seem doable. Each of the nine proposals carries the potential of significant cost savings for taxpayers -- at least $250 million apiece, per biennium.

Many of the ideas are familiar. The notion of paying health care providers to keep patients with chronic disorders out of hospital emergency rooms springs out of two task force reports in 2008. The Legislature is already looking at ways to minimize incarceration of some criminal offenders, intervene early with at-risk young children to avert their need for special education, and keep more frail elderly people in their homes. "Minnesota's Bottom Line" is well positioned to spur and guide the Legislature's actions.

The foundation proposals don't completely avoid tax increases. They pick up on House tax chair Ann Lenczewski's proposal to scrap many of the deductions, exemptions and credits in the state personal and corporate income tax code. Eliminating those breaks would mean higher taxes, primarily for high-income filers.

The foundations' proposal notes that many of those tax breaks were enacted years ago for beneficial purposes but never reviewed for their effectiveness. In a number of cases, the purpose for which they were put into law might be better and more inexpensively served another way.

The foundations deserve applause for leaving their comfort zones and wading into the state's politically charged budget debate. Though they say they aren't endorsing any particular bill for balancing the state budget this year, their ideas are bound to inform the deliberations at the Capitol.

What's more, if the foundations can generate the statewide discussion they seek, their ideas can have greater impact at the Legislature in 2011. That's when, with federal stimulus money set to run out, strategies for avoiding draconian fiscal measures will be in great demand.

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