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.
The Association of Metro School Districts announced that 24 of 46 school districts are projected to borrow $382 million in FY 2012 at a cost of $3 million in interest. The districts will lay off over 600 staff. The Richfield Public School District projects it will borrow $16.5 million with interest costs of $90,000 and lay off 18 staff. While the Minneapolis Public School District does not anticipate having to borrow, the district has cut nearly $5 million for FY 2012. The borrowing and staff reductions are a result of last year’s budgeting scheme that increased the K-12 shift to 60/40. The survey is available here: http://politicsinminnesota.com/files/2011/11/AMSD-Budget-Survey-2011-2012-.pdf
A few other items of interest:
The Minnesota House of Representatives is now accepting applications for the 2012 High School Page Program. The program is open to all Minnesota high school students in their junior year. Applications are due December 16. More information is available here: http://www.house.leg.state.mn.us/edprog/over2p.htm
Two programs are available to low-income consumers to help pay for basic residential telephone service. Lifeline, http://www.lifeline.gov, provides discounts on monthly telephone bills that range between $8 and $10 per month. The State of Minnesota provides an additional $2.50 per month discount. Link-Up provides a discount on the cost of installing telephone service. Both discounts are available for a primary residential phone and some wireless phones. For more information, contact the Minnesota Public Utilities Commission at 800-657-3782 or consumer.puc@state.mn.us
The Department of Commerce has provided a list of energy-saving tips for the winter. As the first snowfall has hit, now is a good time to make sure your home is ready for the season ahead. http://mn.gov/commerce/energy/media/newsdetail.jsp?id=207-33832
Last, if you are planning to get a flu shot but aren’t sure where to go, the Minnesota Department of Health provides a search engine to find locations near you. Go to http://t.co/7BgHr5Q6 and enter your zip code.
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
November has begun, bringing an end to fall colors and a day of local elections in many areas of the state. For District 63A Richfield residents, this means school board elections and a school referendum ballot question for Richfield Public Schools on Tuesday, November 8.
The district is seeking an increased levy to replace the existing 10-year levy. More information about the referendum is available here: http://www.richfield.k12.mn.us/ (click on “Referendum”) The Richfield Patch has archived individual Q&As with each of the 15 residents running for the 3 open seats on the school board. Please take the time to inform yourself about the levy question and school board candidates prior to Tuesday’s election.
Despite extensive media coverage on the Vikings stadium issue, the main focus at the Legislature during the past month has been job creation, what I believe to be our top priority for the upcoming legislative session. The Governor’s Job Summit was held October 25 in downtown St. Paul. Over 700 attendees listened to an executive panel on Minnesota Jobs in the Global Economy and keynote speaker Dr. Michael Mandelbaum. Eight morning breakout sessions focused on energy efficiency, technology and innovation, worker skills, and access to capital, and seven afternoon sessions focused on economic development tools, regional workforce needs, tax reform, and long-term infrastructure projects.
At the summit, I participated on a panel led by Minnesota Department of Human Services Commissioner Lucinda Jesson entitled “Better Healthcare at Lower Costs to Business and Employees.” We explored how to make healthcare more affordable for businesses and individuals, and I shared how reforms we enacted in 2008 are already leading to better care at lower costs. The following week, Governor Dayton signed an executive order establishing a Vision for Health Care Reform in Minnesota and appointing members to a Minnesota Health Care Reform Task Force. Read about the jobs summit, the health reform executive order, and other news on the Governor’s blog: http://mn.gov/governor/blog/ You can also sign up to receive the Governor’s newsletter here: https://public.govdelivery.com/accounts/MNGOV/subscriber/new
Contrary to rhetoric about the growth of government, The Business Journals’ “On Numbers” study, a comparison report on data from the U.S. Bureau of Labor Statistics, finds that Minnesota’s public employee workforce has actually declined over the last four years. See the attached table to see how Minnesota compares to other states.
Minnesota has received $15.5 million from the federal government under the Small Business Jobs Act. The money will be used for small business loans and can also be used as seed money for angel investment funds. DEED estimates the funds will serve 1,200 small businesses, create 3,000 new jobs, and attract $200 million in private investment.
The Children’s Defense Fund-Minnesota released a report this month on the Minnesota Family Investment Program (MFIP), our state’s economic assistance program for poor Minnesotans. It finds seven out of ten Minnesotans receiving MFIP support are children, more than half are age five or younger. With a 62% increase in the child poverty rate in the state over the last decade, a focus on economic supports, prevention, and early childhood education is critical for Minnesota children and our future prosperity. The report is available on the CDF website: http://www.cdf-mn.org/
Speaking of investment in our children, the Minnesota Department of Employment and Economic Development has issued a request for proposals for the Minnesota Youth Workforce Development Competitive grant pilot program. Eligible applicants are youth-serving organizations that provide work experience and skill acquisition for at-risk youth. More information is available here: http://www.positivelyminnesota.com/About_Us/Notices_Announcements/Contract-Grant_Opportunities/MN_Youth_Workforce_Development_Competitive_Grant_Pilot_Program.aspx
With winter fast approaching, I wanted to share information about Minnesota’s cold weather rule and programs available to help keep you warm during the upcoming season. The cold weather rule is in effect every year from October 15 through April 15. If your household income is at or below 50 percent of the state’s median income, you are not required to pay more than 10 percent of your monthly household income for heating bills. However, you must contact your utility to set up a payment plan in order to prevent your heat from being disconnected. Contact the Public Utilities Commission for more information at consumer.puc@state.mn.us or 651-296-0406 or 1-800-657-3782. Additional details are available on their website: http://www.puc.state.mn.us/puc/consumers/shut-off-protection/index.html
Assistance paying for heating bills is available for qualified households through the Minnesota Energy Assistance Program. Minnesota was recently awarded $73.5 million in federal funds from the Low-Income Home Energy Assistance Program (LIHEAP). More information is available from the Minnesota Department of Commerce http://mn.gov/commerce/energy/consumers/Heating-Assistance/. Stay warm this winter!
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.
The longest shutdown in state history is over. Thank goodness.
That said, I am deeply disappointed by, and concerned about, the final Republican budget that was adopted. At the end of the day, the Republicans agreed to spend $1.5 billion more than they claimed they needed for the six months leading up to the government shutdown. But the Republican plan that Governor Dayton accepted to end the shutdown offers nothing but a beg, borrow, and steal approach that mortgages the future of our state. I voted “No.” You can watch my floor speech in opposition here.
The final Republican budget solved 40 percent of the $5 billion state budget deficit by making a little over $2 billion in difficult cuts — and everyone understood we needed to make significant cuts. The remaining 60 percent of the solution was a non-solution. First, the Republican budget steals over $2 billion from our schools with no plan in place to pay it back. Using our schools as a piggy bank forces school districts like Minneapolis and Richfield to engage in short term borrowing themselves, which takes needed funds away from Minnesota classrooms.
In addition and deeply concerning, the Republican budget includes Washington D.C.-style deficit spending for the first time in the history of Minnesota. The Republican plan authorizes the state to issue $700 million in bonds to pay for current spending. It is like using a credit card to cover day-to-day expenses with no plan and no resources to pay the credit card off. Minnesota has never borrowed against future revenue to fund current operations. And it will cost us in the form of hundreds of millions of unnecessary interest charges that our state will be paying for years to come.
In short, the legislative session started with a $5 billion deficit and the Republican budget leaves us with at least a $4 billion deficit two years from now.
Of course, it is unfair to me to simply complain. The fact is that the legislature had a choice. We could have adopted a permanent, fair and balanced solution supported by the majority of Minnesotans in every poll that asked the question. I supported a plan that included significant cuts but also asked everyone in the state to participate in balancing the budget. Instead of borrowing an additional billion and half dollars as the Republicans did, we could have asked people making over a million dollars a year to pay the same amount in state and local taxes as hard working middle class Minnesotans. We could have asked big corporations who hide profits overseas to play by the same tax rules as Main Street small businesses. Such a tax fairness agenda would have allowed us to avoid the Republican’s borrowing scheme and actually started solving our long term deficit problems.
Needless to say, I am deeply disappointed by the budget solution.
In addition, this was supposed to be the “jobs, jobs, jobs” session. All too many are struggling these days. 200,000 are still without jobs, and many of those lucky enough to have one are facing pay cuts, and are still struggling just to make ends meet. Unfortunately, the Republican-led legislature did next to nothing to support good-paying jobs for middle-class Minnesotans. They chose instead to attack job protections, and the budgets they proposed would have caused tens of thousands of layoffs – including many in the health care industry, one of the only parts of the Minnesota economy that is growing right now. The one bright light is a bonding bill that Governor Dayton insisted upon which will put several thousands of Minnesotans to work restoring our state’s infrastructure.
Finally, I am deeply concerned with the relentless focus we saw in the legislature this year on imposing conservative social policy on the people of Minnesota from criminalizing stem cell research to bringing school vouchers to our state. The Republican majority ended the regular session by spending the last evenings not balancing the budget but instead passing a constitutional amendment to limit who can get married. The Republicans forced the state into shutdown by demanding that the Governor agree to a page and a half of severe social policy as a condition to passing a budget. My hope for the 2012 session is that the focus will turn from social policy that divides us to a government reform agenda that will unite us.
At the end of the day, the results of this session do not reflect Minnesota values. I will continue to work hard to put our kids, our schools, our seniors and middle class families first.
As always, I welcome your comments, questions, concerns and feedback. 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., Saint Paul, Minnesota 55155.
Paul Thissen
State Representative
Minority Leader
District 63A
The longest shutdown in state history is over. Thank goodness.
As the smoke clears, it is fair to ask what the new Republican majorities accomplished — other than missed deadlines and a painful state government shutdown — in their first year leading the state Legislature. The answer to that question, unfortunately, is nearly nothing other than a beg, borrow, and steal budget that jeopardizes the future of our state.
Let’s look at the facts. This was supposed to be the “jobs, jobs, jobs” session. All too many are struggling these days: 200,000 still are without jobs, and many of those lucky enough to have one are facing pay cuts and still are struggling just to make ends meet.
Unfortunately, the Republicans did not lift a finger to support good-paying jobs for middle-class Minnesotans.
They chose instead to attack job protections, and the budgets they proposed actually will cause layoffs — including many in the health care industry, one of the only parts of the Minnesota economy that is growing right now.
The Republican beg, borrow and steal budget also continues the failed financial shenanigans of former Gov. Tim Pawlenty, balancing the budget on the backs of middle-class Minnesotans.
We’ve paid more and gotten less for far too long. Yet instead of defending our wallets, the Republicans raided them — resorting to the old pass-the-buck plan of cutting aid to communities across Greater Minnesota, which means residents will be paying increased property taxes and getting less police and fire protection.
And they are solving a $5 billion state budget deficit by borrowing $1.4 billion and leaving a multi-billion dollar deficit two years from now. That is the height of fiscal irresponsibility.
So, if the Republicans weren’t standing up for middle class families, who did the Republicans work for this session?
Corporate special interests — those who donated hundreds of thousands to Republican campaigns to gain legislative majorities — got to keep their special tax breaks that allow them to hide their profits overseas.
Millionaires also did very well, thanks to the Republicans. In fact, the Republicans were so adamant that the wealthiest Minnesotans not be asked to play a role in solving our historic budget deficit that they took our state to shutdown in order to protect them from paying the same amount of taxes that middle class families pay — not even temporarily.
Not even in order to prevent historic cuts to our state colleges and universities, or cuts to nursing homes and support for seniors and the disabled.
By the way, only 7,700 people would have been affected by the so-called “millionaire tax” — and just half of those even are Minnesota residents. Talk about priorities.
Republican legislators are not working for us. Their budget begs for money from seniors who can’t afford it, borrows from ourselves at a terrible rate and steals from our future by shifting funds for our children’s schools.
It’s a budget that protects millionaires in Wayzata at the expense of folks in Worthington, Willmar, and Wadena.
Those aren’t DFL priorities, and they certainly aren’t Minnesota values. We deserve legislators who will put our kids, our schools, our seniors and middle-class families first.
And that’s exactly what I and my DFL colleagues will continue to do as long as we have the honor of serving Minnesota.
The fact is that this is a beg-borrow-and-steal budget. It borrows and steals from Minnesota’s future and begs the people of our state to look the other way as once again you simply kick the can down the road. We can and must do better. Minnesota’s prosperity and future depend on it.
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