How to make state budget easy to balance

February 24, 2009 at 11:22PM

The state is again seeking to eliminate a structural deficit through accounting shifts and other sleights of hand. (Our state's accountants must be incredibly clever. We've been balancing budgets with accounting shifts for years, and they never seem to run out of new ones.) The dirty little secret is that balancing the state budget would be easy — if our leaders were willing to kill a few sacred cows. Here are a few that should be sent to the slaughterhouse:

Cut the size of the Legislature. Minnesota has far more legislators per capita than even a geographically and economically complex state like California. Maintaining this large a Legislature is expensive. Even more expensive is the unnecessary legislation the senators and representatives must generate to demonstrate they are "doing something." The Legislature should be reduced in size, and legislators' compensation and per diem should be reduced to a level appropriate for a part-time Legislature.

Eliminate the education monopoly. The teachers' union has a stranglehold on K-12 education in this state. The result is high per-pupil education costs and a never-ending demand for increases in funding, despite questionable performance in many districts. Private schools should be allowed to compete for K-12 students and dollars.

Turn off the welfare magnet. Minnesota offers the most generous welfare benefits in the Midwest. Many people relocate here, not to sample our lakes, but to partake of our welfare benefits. Taking care of your own is one thing. Drawing in welfare recipients from all over the country is absurd. The financial incentives for people to relocate here should be eliminated.

Place a moratorium on light-rail projects. These projects are incredibly expensive to build, serve only a small percentage of state residents, and run perennial operating deficits. A state flush with cash might construct such projects as a luxury. A state with a huge deficit should focus on moving the most people with the fewest dollars. That's what roads do.

Reduce or eliminate the corporate income tax. Minnesota has one of the most burdensome corporate income taxes in the world. This tax discourages businesses from staying or locating here. Corporations employ people, and people pay income and sales taxes. The reduction or elimination of the corporate income tax would likely increase overall state revenues.

Outsource whenever possible. Law enforcement should be performed by state employees. Most other tasks should be evaluated for possible outsourcing. If let competitively, rather than simply assigned to ever-growing state departments staffed by union employees, most tasks could be performed more cheaply by the private sector.

Repeal the prevailing wage law. The state prevailing wage law requires nonunion contractors to pay union-scale wages and benefits on state-funded construction projects. It also forces them to adopt inefficient union work practices. It drives out competition and subsidizes construction unions with taxpayer funds. It performs no valid public function and should be repealed.

Ban project labor agreements. The state often requires nonunion construction contractors to become signatory to union collective-bargaining agreements in order to work on state projects. This practice drives out competition on such projects and subsidizes unions with taxpayer dollars. The use of such agreements should be banned.

Stop trying to run everything. Government in this state is ubiquitous. The state subsidizes or regulates endless activities that should be left to market forces. Many of the most straightforward occupations are burdened with state licensing requirements and regulations. Now the state is injecting itself into a host of lifestyle issues, like smoking and cell-phone usage. The state should focus on its core responsibilities and competencies, and stop trying to dominate every aspect of people's lives.

If our leaders butcher these sacred cows this legislative session, they'll eliminate the deficit now and in the future. If not, look for deficits — and accounting shifts — as far as the eye can see.

Gregg J. Cavanagh, Maple Grove, is an attorney who practices principally in the areas of labor and employment law.

about the writer

about the writer

GREGG J. CAVANAGH