If we did it all through spending cuts…

Let me be clear. We cannot solve our budget deficit through revenue raising alone. And no one is seriously proposing that we try. Nevertheless, I still hear people seemingly dismiss the idea of raising revenues at all because by itself, revenues wouldn’t fix the whole problem. However, any revenue we can raise will decrease the amount we need to cut from vital services.

Let’s look at what it would take to solve the whole budget deficit through spending cuts. The $4.8 billion deficit amounts to 13% of general fund spending. If each area of the budget took a 13% hit from their FY 2010-11 base budget, the amount that lawmakers would have to cut would be:

  • Education – $1.8 billion reduction
  • Health & Human Services – $1.5 billion reduction
  • Higher Education – $420 million reduction
  • Public Safety – $246 million reduction
  • Property Tax Aids & Credits – $451 million reduction (this area includes aids to cities and counties and property tax refunds)
  • State Government – $82 million reduction
  • Environment & Energy – $50 million reduction
  • Economic Development – $38 million reduction
  • Agriculture & Veterans – $34 million reduction

In the end, this deficit won’t be solved purely through spending cuts. Policymakers are sure to dig up some one-time revenues, find a few budget gimmicks and raise revenues one way or another. And budget areas will not take an equal hit – it’s likely that K-12 education and public safety will get some protection, which means other areas may take a bigger cut. However, hopefully seeing the potential size of these spending cuts will help people understand the need for some more revenues.

-Christina Wessel

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
This entry was posted in Budget Process and tagged , , , . Bookmark the permalink.

Leave a Reply