The November economic forecast was released today. The forecast projects an $876 million surplus in our current two-year state budget. That's good news, as long as it lasts.
But I think most of us understand that when you have some money in your savings account (like the current surplus) but you've maxed out your credit card, your savings account balance isn't real. That is exactly the situation we're in today.
Under state law, all of the resources will go to pay back the state budget reserve and cash flow account. While the short-term surplus is good news for Minnesota, it does not come close to addressing our state’s long-term deficit. It would take a total of $4.2 billion – not accounting for inflation – to balance the next budget and pay for the school shift, reckless borrowing, and the other one-time fixes from the previous budget.
You may fairly ask, How is it that the states books still aren’t balanced long-term after a nearly three-week state government shutdown? The short answer is that the Republican majority in the Legislature refused to solve our state budget deficit in the way supported by a majority of Minnesotans; namely, a balance of cuts (which everyone agrees needed to be made) and fair tax reforms that ask the richest Minnesotans and large corporations to pay the same share of their income in taxes as hard working middle class families and small businesses. Instead, the Republicans chose to borrow over $3 billion in one-time money from schools and from future state revenues to pay for ongoing expenses and to shift the burden of paying for schools and public safety to local property taxpayers.
Beyond the states own books, however, is a larger problem with how the state has conducted its business over the last decade. First at Governor Pawlenty’s and now the Republican legislative majority’s insistence, the only discussion has been how much to cut, cut, cut. They've argued that is how you grow an economy. Well, I think we can finally conclude that their approach has not worked. Middle class families are not better off today than they were ten years ago and our economy has not thrived. The state budget may be balanced in the short term, but we've done serious damage to the budgets of families, small businesses, seniors and students with this squeeze-the-middle class approach.
A clear example of this middle class squeeze is property tax increases. Many of you have received Truth in Taxation statements in the mail informing you of your proposed property tax for 2012. A number of you have contacted me rightly frustrated that your taxes are increasing, in many cases despite a decrease in the value of your home.
According to a Minnesota Department of Revenue analysis: "Property tax levies are proposed to increase an average of 1.2 percent statewide if proposed local tax levies are adopted by local governments later this year. Levy increases combined with the elimination of a state-paid homestead credit during the 2011 special legislative session will increase the amount of taxes paid by Minnesota taxpayers by an estimated 4.7 percent, or $379 million." http://bit.ly/sewv3p
A large share of these increases stem from the elimination of the Market Value Homestead Credit (MVHC), another change I opposed. With this change, Republicans eliminated a program that provides $538 million per biennium in property tax relief for 95% of Minnesota homeowners and replaced it with a program that provides $0 in property tax relief. In Hennepin County, property owners will now have to pay an additional $49 million as a result of the change. http://www.hennepin.us/understandpropertytax
Fortunately, DFL legislators have proposed to remedy future property tax increases. This fall, House DFL Representatives Ann Lenczewski and Paul Marquart announced that they will introduce a bill to undo elimination of the MVHC and restore the credit. I have signed onto this legislation and hope we will be able to persuade our Republicans colleagues that increasing property taxes on middle class Minnesotans is bad for families and bad for our state.
It is a lengthy quote, yet, the email says much more. The Strib link in the opening paragraph is added; other two links are Thissen's. I urge readers, whatever their personal political views might be, to sign up and subscribe, since knowing what Thissen writes is useful information across the political spectrum. Being informed reaches beyond knowing what only one side of things argues. A realistic view usually requires seeing arguments you may discredit, but you should know when they are being advanced.
When I wrote the headline and started the post, I was unsure. So -- There is a convenient online direct subscription link (see concluding paragraph below), yet also, in closing Thissen notes contact routes where I am certain an email requesting inclusion on the newsletter updates will be welcome and successful in signing up:
As always, please continue to be in touch with your comments, questions, and concerns. You can reach me by phone at 651-296-5375, by email at rep.paul.thissen@house.mn, or you can visit or send mail to my office, 267 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, Minnesota 55155. I appreciate hearing from you.
Paul Thissen
State Representative
Minority Leader
District 63A
Beyond that in the emailing, informative house record pages are online, here and here (with the latter having a convenient signup link to be put onto the Thissen emailing updates list).