Directions: On desktop displays, use your mouse wheel to zoom into the graphic. On mobile devices and tablets, use pinch to zoom.
‘Nothing needs to happen at the 2016 Legislature.” That’s what state lawmakers have been telling each other as they prepare to drive hard bargains with their partisan opponents. In one sense, they are right. No government shutdown or breakdown will ensue if this spring’s state lawmaking exercise comes a cropper.
But for Minnesota to thrive in years ahead, much should happen before the mandatory May 23 adjournment date. A forecast $900 million surplus through mid-2017 presents an opportunity for long-term gain that’s too good to waste. What’s more, the problems caused by insufficient state funding of transportation, services for the disabled, corrections, broadband and more will impede Minnesota’s progress if they are ignored.
Here’s how the Star Tribune Editorial Board would amend the state’s 2016-17 budget:
• Starting point: $1.03 billion. That’s the sum of the $900 million forecast surplus for the current two-year budget plus $130 million transferred to the general fund from the health care access fund, as Gov. Mark Dayton recommends. His argument for making the transfer is strong: The health fund has a robust $610 million surplus, and the general fund is bearing some costs for low-income adults that the 24-year-old health fund was intended to cover.
• Safety first: Leave $150 million on the bottom line. A slowing global economy and Minnesota’s tightening labor supply augurs caution. So does the urging of state budget director Margaret Kelly that no more than $500 million in fiscal 2017 should be devoted to measures that recur in 2018-19. Awareness that spending “tails” often turn out to be longer than expected should inspire legislators to favor one-time spending when possible.
• Let’s make a deal: $128 million ongoing, $200 million one-time. The transportation and tax bills that stalled last session should get moving — though with surplus dollars scarcer than expected, those bills can’t go as far as once hoped. Our plan yields in part to GOP desires to transfer transportation-related sales taxes from the general fund to the highway trust fund. We shift $75 million in vehicle rental and leasing taxes in fiscal 2017, and urge that this fall’s voters be asked to make that change permanent, via constitutional amendment.
Republicans in turn should yield to calls for a modest boost in transportation-related fees and taxes. And lawmakers should seize this year’s opportunity to spend one-time money on either transportation or building projects, including railroad safety measures. Our plan directs $210 million to that end. (We’ll address transportation funding more fully in a subsequent editorial.)
Similarly, legislators should scale back their appetite for major tax relief. But a modest tax bill that balances GOP and DFL priorities is affordable. Ours includes a $44 million statewide business property tax cut, which tops the business community’s wish list this year and has strong GOP backing. We would exempt the first $150,000 of market value from the statewide tax, an approach that would be particularly beneficial to small businesses. (We’ll detail shortly our support for tax measures DFLers favor.)
• “One State” agenda: $81 million ongoing, $70 million one-time. In our December series “Better Together,” we argued for efforts to close a growing economic and cultural gap between metro and outstate Minnesotans.
Aforementioned transportation improvements topped our One State agenda for 2016. We also favor a $46 million increase in city and county aid, restoring those programs to their 2002 level; a one-time infusion of at least $50 million in public-private matching grants to bring broadband to poorly served portions of the state, and $35 million for the state’s two public higher-education systems, the bulk of which would flow to Greater Minnesota. A $20 million, one-time investment in courthouse security would also be of particular benefit outstate.
• A fairer Minnesota: $113 million ongoing, $53 million one-time. A rising poverty rate among Minnesota’s African-Americans during an economic recovery should be a summons to action by the Legislature. We favor a long-overdue increase in monthly grants to the state’s poorest families, through the Minnesota Family Investment Program, for $28 million; federal compliance and a rate increase for means-tested child care subsidies, for $28 million; a boost in child care tax credits for low- and middle-income families, for $47 million, and home nurse visits for teen parents, for $10 million. Those spending lines would all recur in subsequent budgets.
To that list, we’d add $25 million in one-time funding of a grant program for preschool development in underserved neighborhoods; $18 million for a one-time expansion of youth and adult job training opportunities for low-income Minnesotans, and $10 million for matching grants to spur minority-owned business start-ups in distressed neighborhoods. Those sums represent down payments. Legislators will have more work to do to advance racial equity in 2017.
• Just the basics: $183 million ongoing, $52 million one-time. The Legislature has skimped long enough on some things Minnesotans expect their state government to do well — corrections, cybersecurity, care for the mentally ill, support for the developmentally disabled, water treatment. This is the year to catch up.
Our budget puts $40 million into pay raises for providers of home and community-based services for the disabled, which report a worker shortage of near-crisis proportions, and another $25 million to beef up staffing in the state’s correctional institutions. The case is strong for more psychiatric beds at the state’s regional treatment centers, more staffing at the Minnesota Security Hospital and sex offender program, and full funding of state-operated services for the disabled, which are running a deficit. That set of improvements carries an $85 million price tag that will recur in future years.
The plan also adjusts the state tax code to comply with federal changes, for $19 million. It provides additional debt service to accommodate a $1.2 billion bonding bill — slightly smaller than Dayton’s, but still big enough to start a regimen he recommends of water treatment upgrades around the state. It includes one-time upgrades in both Capitol complex security and state cybersecurity. It spends $3 million to increase jurors’ per diems from $10 to $20 per day. And it embraces Dayton’s proposal for paid parenting leave for state employees and the establishment of a child care center for state employees in the Capitol area.
Needed? In the starkest sense, perhaps not. But we submit that these state budget adjustments would serve Minnesota well. And voters send legislators to St. Paul not to perpetuate partisan disputes, but to work through them to Minnesota’s benefit.