Residual Forces

They Call It A Budget Deal, I Call It Spending Addiction

The State Legislature and Governor struck a deal last night to spend more of our money. Oh don’t let the news reports twist the story, they didn’t just figure out how to close the $1 billion deficit (they created by spending too much). Nope they spent more of our money and committed Government to spending more of it in the future. 

What Gov. Pawlenty and the DFL Legislature agreed to is much closer to a comprehensive omnibus bonding bill than it is a budget closing deficit. They spent more on special interest pet projects, ones that were scuttled or derailed earlier in the session. 

Both sides will claim victory, well I guess the Legislative Republicans won’t they must have been barred from participation in the negotiations…. if the lack of media mentions are right. This bill was Gov. Pawlenty vs. SOTH Kelliher & Poggemiller. 

I know that some people are going to race to the podiums and keyboards to scream brilliance of Pawlenty, but I don’t think this is a victory for conservatives and the Republican party. Let’s take a look at this list from CCO of some key points in the agreement. (all emphasis mine)

–Takes $500 million from the state’s reserve fund, leaving $153 million.

–Provides public schools $51 more per student, financed in part by a $10 million cut to Gov. Tim Pawlenty’s QComp program that offers incentives to districts with teacher contracts based on performance.

–Calls for compensation increases for nursing home workers.

–Reduces state payments to hospitals.

–Higher fees totaling $500,000 are assessed on industrial water users, depending on the volume of water.

–Adds a $1.75 surcharge to driver’s license issuance fees through June 2012.

–Cuts to the Legislature of $1.8 million, the governor’s office of $113,000, the attorney general’s office of $749,000 and the secretary of state’s office of $195,000.

–Gives the Department of Revenue $7 million to go after individuals and businesses not paying all the taxes they owe, which officials expect to produce $21 million more for the state next year.

–Makes $21 million in combined cuts to the University of Minnesota and the Minnesota State Colleges and Universities system budgets.

–Cuts $1.25 million from a program that provides incentives to gas stations that install E-85 pumps.

–Redirects $500,000 from a state marketing account to lure filming of a Coen Brothers movie to Minnesota.

–Allocates $300,000 for completion of a polar bear exhibit at St. Paul’s Como Zoo.

–Puts $40,000 toward a memorial to former Vice President Hubert H. Humphrey on the Capitol grounds that has been in the works for at least 15 years. The same amount is set aside for a Capitol worker’s memorial.

The items crossed out are pet projects or increases in spending and actually increase spending IE teh deficit. And that is hardly any of them. Pawlenty agreed to another $70 million for a choo choo train that will destroy part of the Twin Cities. Actually the CCO list goes on let’s just look at all the projects and spending. (again, emphasis mine)

Some elements of a tax bill passed Sunday by the Legislature:

–Increases the maximum state refund tied to property taxes. The refund amount is based on income and property taxes payable for 2009.

–Imposes a levy limit of 3.9 percent on local governments. But it allows for exemptions tied to police and fire services, areas dealing with high mortgage foreclosure rates and for counties hit with federal grant reductions.

–Adds more than $60 million to the state aid given to local governments. [AAA note: MUNICIPAL WELFARE]

–Requires a study of state aid to local governments that must be completed by December 2010. [AAA note: MUNICIPAL WELFARE]

–Changes the definition of a foreign operating corporation, a tax code change that will bring in $109 million to the state treasury in 2009.

–Provides a tax credit of up to $750 for veterans and members of the military who served more than 20 years or were disabled in service.

–Allows Bloomington to raise the sales, entertainment and restaurant taxes at the Mall of America and the lodging tax citywide to help finance construction of a major expansion.

–Permits Mankato to raise its food and beverage and entertainment taxes to help pay for a new women’s collegiate hockey arena.

–Leaves a business incentive program known as JOBZ (Job Opportunity Building Zone) intact.

—— [AAA's note: Yes, we're still going to pick winners and losers and the unfortunate businesses who have been here all along will be forced to pay the already high and burdensome tax levels while new ones will be able to come in and have unfair advantages]

 

 

Some elements of a borrowing proposal passed Sunday by the Legislature:

–Approves $70 million for the Central Corridor light rail line running between Minneapolis and St. Paul.

–Allows the state to spend up to $20 million to acquire land for a new northeastern Minnesota state park on Lake Vermilion. Any leftover money can be used to furnish the park.

–Provides $2 million to remove and replace the old Cedar Avenue bridge in Bloomington for bicycle commuters and recreational users.

–Allocates $10.1 million for work on the Minneapolis Veterans Home campus.

It seems the one main thing that Pawlenty and DFL Legislators forgot to bring to the negotiating table was the fact that we’re in an economic slump and the state is running a billion dollar deficit. By the end of the session the citizens and taxpayers of this state are the biggest losers. We have more spending, less accountability, and a Legislature and Governor who seem more inclined to feed their addiction to spending than ensuring a sound financial health of our state or, who knows, making sure the citizens and businesses in the state aren’t working for the Government instead of the other way around. 

Unless Republicans make major gains and retake the Minnesota House in this November’s elections, you can bet your bottom dollar that Minnesotans will have taxes raised like never before next session. This addiction to spending and commitment to increases is going to soak us in the very near future. 

Here’s where the reality will rain on the parade that was this session ending agreements. Will our economy be back to levels of last year? IE will revenue be up naturally to meet these new higher levels of spending, or to repay the funds that were borrowed form? If not, they will simply raise taxes and fees in order to pay for all their pet projects and the entitlements. 

No one in the state or federally has done anything to try to lower energy prices, and in fact all signs are that our bills will be even higher next year. And do you think all these people who can’t pay their mortgages are gonna win the powerball and somehow be able to pay all of a sudden? FOlks, these legislators are banking on an economic turnaround in order to pay for all these feel good things. They wrote checks their butts won’t have to cover. You and I will. 

We will see another deficit next year? It would take a miracle turnaround of the economy in order to avoid one. This was the year for the State government to learn to live with in its means. They blew a $2.2 billion surplus last year, increased spending almost 10%, and still this year they came back and soaked us for even more. But nope, instead of finally figuring out that the citizens and businesses of this state aren’t ATMs and revenue doesn’t grow on trees, they actually increased spending once again. 

And all the while they already had a $1 billion deficit. 

Government spending went up over $7 billion dollars this year. With the transit tax bill, all the new spending and projects, and with all the fee and surcharges, taxpayers get soaked, and the politicians get to go fly around the state patting themselves on the back. 

Sure, these people can try to put lipstick on this pig, but since we’re paying for the lipstick and the pig we can’t get too excited about the addiction to spending that our lawmakers are suffering from.