Archived Story

Minnesota is entering a season of change

Published 8:18am Friday, November 26, 2010

A couple of times a year the Chamber of Commerce invites members to a lunchtime briefing on legislative issues. This typically draws a handful of people who are particularly interested in the subject — but it doesn’t exactly pack them in like a Michael Veldman and Friends Christmas show.

Last week, though, as a representative from the state Chamber prepared to talk about the upcoming legislative session, the people just kept coming, more than filling the Austin Town Center meeting room. Fortunately, there was enough pizza for the varied crowd of business people, educators and local government workers.

Why the crowd? Perhaps because this winter is likely to be eventful for just about everyone in Minnesota. Faced with the likelihood of billions of dollars’ difference between revenues (that is, your tax money) and expenses, the state of Minnesota is going to have to make some tough choices about both taxes and spending.

That might sound like the same song and dance that we go through every couple of years but, at the risk of cliché, this time it’s serious. Not only is projected state spending far outstripping projected revenues, but this election’s massive changes in the Legislature are bringing to St. Paul a crew that is highly motivated to make changes.

What that means for the hypothetical “average” Minnesotan remains to be seen. One thing that is sure is that even holding the line on taxes is likely to mean fewer government services — and not just state services but those delivered locally, as well. Because of the way that Minnesota distributes and shares its various tax revenues, much of the state’s $33 billion “general fund” is disbursed back to cities and schools.

So, in theory, and probably in practice, when state lawmakers start looking for ways to balance the budget (unlike the federal government, states must have balanced budgets), there’s a good chance they’ll reduce the money that trickles down to local governments.

This is among the likeliest of places for state lawmakers to start cutting because the pain of reduced city, school and county services is something voters are not so likely to lay at legislators’ re-election doorsteps. Likewise, there’s a fair chance that rather than raise taxes at the state level, legislators will make up for reduced aid to cities, counties and schools by making it easier for those local governments to raise taxes; this lets anti-tax legislators wash their hands even as tax increases are put in place.

In turn, local governments will have to make a decision about how to get by with fewer resources — or about whether to raise taxes to keep services at their current level.

The question will quickly become, “what services are essential?” Cities, including Austin, may have to decide whether they can afford their beautiful park systems, whether streets can be cleaned and maintained at their current level, whether it’s possible to get by with fewer police officers or firefighters.

To some extent, though, cities, counties and schools won’t have the ability to get creative about saving money. Indeed, the state has rigged the system so that the cuts local governments can make are always the most painful possible.

If, for example, a school district found a creative way to reduce costs or improve learning that required starting classes before Labor Day, it would not be able to do so. State law says school can’t start before Labor Day.

If a city wanted to reduce its contributions to a regional library system, it couldn’t do that. State law says that once a city participates in a regional library system it can’t ever reduce its contributions.

So not only are there likely to be some real changes in how government pays for and raises funds for what it does, there will also be games within games when it comes to making the decision.

Those who get hurt worst by changes like those coming to Minnesota are typically those who let themselves be blind-sided. Just as for the three-dozen or so Chamber members who attended last Friday’s information session, it’s worthwhile for everyone to stay on top of what goes on at the Capitol this winter.


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