Thursday is back-to-work day for tens of thousands of Minnesotans whose livelihoods and service to this state were disrupted by the longest state government shutdown in U.S. history. Their sacrifice was unfair and unwarranted, and cannot end soon enough.
We wish the shutdown's end could evoke good feeling among all Minnesotans. But there's little reason to celebrate the deal struck by DFL Gov. Mark Dayton and Republican legislative majorities to set a budget for 2012-13 and end the shutdown. It's a short-term fix that leaves the state on shaky fiscal ground -- and ought to compel concerted efforts in the next 18 months to find more cost-effective ways to do public work.
The bills Dayton signed Wednesday better meet this state's needs than did the smaller Republican-backed budget he vetoed in May. But the new budget is propped up by $1.4 billion in one-time measures that heap debt on schools and all but guarantee deficits in future years.
Small-government conservatives defend these bills as a way to force more spending restraint in 2013 and beyond. We'd describe them as unprecedented and irresponsible.
Never before has Minnesota borrowed against a future state revenue stream to pay for government operations, at high interest costs to boot. The tax bill Dayton signed Wednesday pulls $640 million in future tobacco lawsuit proceeds into the next two years' accounts. The upshot in the future will be lower general-fund revenues, larger debt-service obligations and higher interest costs, in part because Wall Street bond houses are bound to scorn what is, in essence, deficit spending.
Almost as ill-advised is a $700 million delay in school payments, forcing many districts to borrow operating funds. Minnesota has "shifted" the timing of school payments before, and has restored the regular payment schedule years later. A shift can be justified near the end of a biennium, when tax increases or spending cuts cannot act quickly enough to balance the books. But employing an emergency tactic at the start of a biennium is a marker of poor management, and using the delay's one-time savings to pay for ongoing expenses compounds the error.
This much fiscal gimmickry in 2012-13 -- on the heels of a similarly squishy budget in 2010-11 -- reveals an inability to find a sturdier bridge between the Capitol's DFLers and Republicans on the rightful size and role of state government, and the advisability of higher taxes.
Republicans wanted a state budget no larger than the one authorized by the 2007 and 2009 Legislatures, even though existing state obligations were forecast to cost $5 billion more. But the GOP product was vetoed because it was loaded with harsh consequences -- a fact Republicans seemed to tacitly acknowledge when they offered the school shift and tobacco borrowing on June 30 to underwrite $1.4 billion more in spending. Dayton initially refused their offer, holding out for higher taxes, then accepted it in the face of a lengthening shutdown one week ago today.
