A path toward economic recovery

On Jan. 6, Minnesota’s state Legislature convened for the 2009 legislative session. Although the celebratory mood of welcoming new members and gathering at the State Capitol was once again evident, there was also somberness reflective of the significant economic challenges facing our state. Nearly 200,000 Minnesotans have lost their jobs, thousands more have lost their homes and their health insurance, and the rising cost of everything from health care to basics such as food and clothing is squeezing already tight family budgets. The primary focus of this session must be Minnesota’s economic recovery.

To begin with, there are significant short-term needs, such as making sure people continue to receive unemployment benefits and health care. We must work to retain and create jobs, help people stay in their homes, and maintain public services such as fire and police departments.

It isn’t enough, however, to only address the immediate. Our position as a national leader has been diminished by the path we’ve been on for the past six years. Inadequate funding for education, hospitals and nursing homes, as well as cuts to city and county aid have not offered tax relief, but have instead driven property taxes up by almost $3 billion since 2002 and increased fees by more than $1 billion. Colleges have seen double-digit tuition increases, making it harder for students to get the education they need to get a good job, and school districts statewide are struggling. Instead of leading the nation in job creation, our state now ranks 36th, and we are consistently ahead of the national average in unemployment.

The choice is clear; we cannot expect different results if we stay on the same path. As we begin the task of responsibly addressing our $4.8 billion budget deficit, we must change the way of doing business in Minnesota.

There are three plausible avenues to help us balance the budget: federal assistance, spending cuts and additional revenue. Regarding the first, there is every indication that President Barack Obama will move swiftly to enact economic recovery legislation, which will include funding for individual states. In preparation for that, the first bill introduced in both the House and the Senate creates a framework for determining how this federal money will be spent when it arrives. We want to make sure these dollars are used wisely and fairly, with the primary intent of creating and retaining jobs and stimulating economic growth.

We are committed to examining our budget to make sure we are spending state revenues wisely, recommending cuts in areas that will do the least harm, and re-allocating funds where they can do the most good. We will also make the budget process more transparent so Minnesotans can better understand where their tax dollars are being spent.

We know, however, that filling the budget hole with federal help and spending cuts alone will cause grave damage to the core values Minnesotans hold dear. We no longer have one-time money at our disposal, such as the tobacco fund, and our rainy day fund was depleted last year to help fill the previous state budget shortfall. To think we can solve this budget crisis without new revenue is not only unrealistic, it would cause irreparable harm. As revenue increases are considered, we will work to make them fair and progressive, as well as hold our most vulnerable citizens harmless — our children, seniors, and hard-working families.

The Governor will release his budget recommendations the week of Jan. 26. The House and Senate will respond with budget recommendations of their own, accepting some of what the governor is proposing but certainly with some differences. Both bodies are working hard to involve the citizens of Minnesota in our budget decisions. Legislative committees will visit communities across the state in the coming weeks to help shed light and show in detail what choices are being considered, and to get feedback from citizens.
Both the House and the Senate have created a website so you can have the opportunity to convey your values and your best ideas for contending with Minnesota’s projected budget deficit. Visit the House site at www.house.mn and the Senate at budgetforum.senate.mn to share your ideas.

There is little doubt we face historic challenges. It is not all doom and gloom, however. We are all firm believers that out of a challenge such as this comes opportunity. We will find new ways of doing things, utilize every resource at our disposable, and work hard to sustain the quality of life Minnesota is known for. Minnesotans are resilient, resourceful, and determined, and on the challenges before us, we cannot afford to fail.