Next Tuesday, January 27th, Governor Pawlenty will be releasing his budget proposal for the FY 2010-11 biennium. Naturally, we are all very conscious of the current challenges facing our state: large and ongoing budget deficits. However, it’s important that we don’t lose sight of the past…and the decision-making that contributed to our current circumstances.
We don’t have to go very far back to find some short-sighted choices. Last session will do.
The Minnesota Budget Project recently released a report – Punting the problem: 2008 Legislative Session ends with a short-term solution – that examines the final agreement reached last May. We have several disappointing conclusions:
- Policymakers relied on budget reserves and other one-time revenues to solve nearly 60% of the deficit in the FY 2008-09 biennium, leaving fewer resources available to solve the deficits we are facing now.
- The heavy reliance on short-term solutions also meant that policymakers did little to chip away at future deficits we knew were coming – the final agreement still left a $946 million deficit for the FY 2010-11 biennium (which has now grown to $4.8 billion, or $5.5 billion if you include inflation).
- The health and human services budget was reduced by $230 million, which amounted to 21% of the final budget-balancing agreement, leaving fewer resources to help Minnesota’s most vulnerable weather the current recession.
Keep in mind that budget deficits have become rather common place since 2002, and that has had a dramatic impact on funding for critical state services. Another source of information is The Lost Decade, a report we released last month that talks about what has happened to funding for K-12 education, child care, housing and higher education as a result of those lean years.