Saturday, June 4, 2011

Dayton's Lopsided Budget Plan

We have a spending problem in Governor Dayton's Minnesota.  Expansion of programs, new entitlements, a limosine for every staff member.  Oops, sorry that one is not there, though there may be some dissapointed Dayton staffers who were expecting them.  But abundant increases for many special interest groups abound in Governor Dayton's vision of what you should be paying for.  We have enough money to budget for everything we need, we do not have enough money for a 22% increase in general fund spending from $30 to $37 billion.

The Legislatures plan increases the annual budget from last years $30 billion to $34 billion, an increase that many fiscal conservatives wish were significantly less.  However this was part of the compromise process that was done in developing the budget with Democratic legislators and with Mark Dayton's, late to the discussion, staff. Governor Dayton however insists that the "all cuts budget" budget must be raised to $37 billion.  How an increase from $30 to $34 billion can be referred to as an "all cuts" budget beggars the imagination.

No Reform to Improve Effectiveness
Dayton's budget is a continuation of same old way .
The status quo approach prevents real reform to change and improve that is in the legislature's plan for how we accomplish our goals in education, health and human services, environment and energy (here and here), and welfare

Killing Jobs
Dayton's increased spending and taxes budget will have very damaging results on jobs in Minnesota.  Businesses currently are waiting to find out the tax burden and employee costs that they will have. Sadly other states will be far more attractive to cash strapped Minnesota businesses.  The jobs will be taken elsewhere, and Minnesota workers will suffer the consequences of bad policy.
January 7, 2011 St. Paul, Minn. — Gov. Mark Dayton laid it on the line to state business leaders Thursday night when he told the Minnesota Chamber of Commerce that Minnesota is under taxed.

Minnesota Chamber of Commerce president David Olson said his organization aims to work with Dayton on three key areas: education, streamlining state regulations and job creation. But Olson argues Dayton can't put an emphasis on jobs and continue his push to raise taxes.

"It's not a message that other states are doing around the country," Olson said. "My biggest fear is that I have members of ours who are being contacted everyday by other states that say 'Come to our state, we'll build your plant for you. We'll train your people.' The best thing we can do here is say we like our businesses. We want to do what we can to keep them here and expand here."

Ignoring National Trends
Dayton is far out of the mainstream that is being followed in virtually every other state.  He ignores the lessons learned by nearly every other governor, republican or democrat, spending must be gotten under control.  These are real decreases in spending, not the "reduction in the increase" that is the negotiated Minnesota Legislature plan, which Mark Dayton derogatorily refers to as the "all cuts plan".
Most governors are proposing major spending cuts.  In the three years since the recession began, states already have imposed cuts in all major areas of state services, including health care, services to the elderly and disabled, and K-12 and higher education. [9] 
At least 39 of the 48 states that have released initial 2012 budgets are proposing major cuts in services next year, on top of cuts already implemented in all those states since the recession began.  In nearly four-fifths of the 44 states for which the necessary data are available, governors are proposing to spend less next year than their states spent before the recession hit, after adjusting for inflation (see Figure 1).  On average, those 44 states plan to spend 9.4 percent less than their states spent before the recession, adjusted for inflation.

The unsustainable plans of Governor Dayton will result in a 20% shortfall.  Businesses will leave, jobs lost, people will suffer.  The budget that was created by the entire legislature looks to provide a brighter future for all Minnesotans.

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