Proposed constitutional amendment would undermine general fund resources and underfund transportation

Many of Minnesota’s priorities – from K-12 education, to financial aid for college students, to broadband access – are paid for through the state’s general fund. However, a bill moving through the Senate would threaten the state’s ability to meet Minnesotans’ needs now and in the future.

Senate File 3837 proposes a constitutional amendment to permanently dedicate certain general fund revenues toward the state’s transportation fund without replacing them with additional revenues. This reduces the amount available to fund other areas of the budget. Transportation is largely funded through dedicated sources, such as the gas tax. As a result, transportation has not traditionally competed with investments like schools, nursing homes, and broadband for the same funding.

Voters would decide during the 2018 general election whether to accept this change. This proposal is a bad idea for three big reasons:

  1. Senate File 3837 would take money out of the state’s general fund, leaving fewer resources for other priorities. The general fund is the state’s largest and most flexible fund; every two years state policymakers determine how to use it to best meet Minnesota’s current needs and invest in the future when they pass the state budget. By permanently taking away general fund dollars, this bill would make it harder to pay for other important priorities. A preliminary estimate shows that Senate File 3837 would take about $200 million annually out of the general fund starting in FY 2020. That’s roughly what it takes to cover the state’s total general fund investment in Jobs, Economic Development, Housing, and Commerce. It’s important to fund our state’s transportation needs, but permanently shifting funding away from other areas of the budget isn’t the right path.
  2. Speaking of funding state transportation needs, this bill would do little to actually fill the need for better transportation funding. In 2012, the Transportation Finance Advisory Committee determined that Minnesota needs $21 billion over 20 years just to maintain the current status of the state’s transportation system. This proposal doesn’t do that, nor does it get us close to funding a world class transportation and transit system needed for a strong economic future.
  3. Senate File 3837 locks down today’s budget choices and limits our ability to address tomorrow’s needs. By putting this language into our state’s constitution, it will tie future policymakers’ hands when they need to adapt to new funding priorities and needs. Reversing this decision and restoring these dollars to our state’s general fund would involve yet another constitutional amendment and ballot question. This bill would needlessly make it more difficult to fund Minnesotans’ priorities like education, health care, economic development, and the environment.

-Clark Goldenrod

About Clark Goldenrod

Clark Goldenrod is the Minnesota Budget Project's senior policy analyst.
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