Solving the near and long-term state budget deficits will be the primary focus of the 2009 Legislative session. State economists warn this is the longest recession since WWII and it likely will take longer for the state to emerge successfully than in past recessions. Therefore, the legislature will be focused on long-term, fiscally responsible policies that set up the state for future success. That will require a combination of government reforms, reasonable spending reductions, and a commitment to preserve the things that have made Minnesota a national leader in the past.
The state’s economists attribute the steep decline to overall economic performance and the current recession, which began in December 2007. Minnesota lost more than 42,000 jobs from October 2007 to October 2008, and the state is expected to lose as many as 77,000 jobs in 2009. The key to emerging from the recession will be job creating policies that will attract new economic activity to Minnesota. Growing opportunities and jobs in the biosciences, renewable energy, and rural economic development should be a high priority. Improving the business climate and targeted investments toward job creation, such as “angel” tax credits or support for local economic development programs like the MN Investment fund can help us reach some of those goals.
Obviously, the state will need to take a close look at existing program, agencies, and expenditures, and review them using the following 3 questions:
1. Is this expenditure an appropriate governmental purpose authorized by our laws and Constitution?
2. Is this expenditure necessary, especially in difficult economic times?
3. Is this expenditure actually producing the intended result, or is there a more efficient and economical way to accomplish this legitimate state purpose?
We need to look at ways to give relief to local governments and school districts. This means taking a hard look at existing mandates and allowing those local units of government more autonomy in moving existing resources to meet existing and essential needs. We need to collaborate and coordinate for more efficient public services in areas of transportation, buying power, combined billing, delivery of service, and administration.
This will be a difficult session, but it is imperative that the Senate, House, Governor, Republicans, and Democrats all get on the same page to come up with solutions that will help lead Minnesota out of this recession. I will continue to lay out some ideas as to how we can do that in the next several weeks leading up to the January 6 session. Please feel to contact me with your ideas as well.
This past Friday I attended a meeting of SCALE, Scott County Association for Leadership and Efficiency. This organization is one of a kind in the state of Minnesota, bringing together the Mayors, city councils, Superintendents, County and City Administrators and others to talk about the issues facing these various units of Local Government. Of course, the state budget and the possibility of losing Local Government Aid (LGA) this December dominated much of the discussion.
Scott County has already trimmed $3 million from its 2009 budget. These cuts will likely mean fewer services available through county public libraries, less money for County Parks, road expansion and maintenance. The county is also reducing its contributions to outside agencies like the County fair, the historical society, and an organization that provides support for battered women.
Cities and counties both have set their budgets for 2009. Northfield is expecting a December LGA payment of $1.4 million. Money has already been spent to provide services to local government departments and agencies assuming the state would fulfill its obligation. Many cities lack the cash flow cushion to sustain large revenue cuts this late in the year, especially without warning.
The state of Minnesota must find $426 million to fill the gap in the current budget shortfall. This must be done by June 30, 2009. If the Governor is set on using LGA to fill that gap, I hope he makes proportional cuts that will allow cities and counties to still receive badly needed checks this December instead of a blindsided approach that leaves our local governments reeling.
According to the state’s November fiscal forecast, Minnesota faces a projected $4.8 billion shortfall for 2010-11, and an additional $426 million for the current budget year. The forecast, derived from numerous economic factors and trends, is a snapshot of the state’s fiscal landscape used by the Legislature and governor to help develop the state’s upcoming biennial budget.
The fiscal news came as no surprise, as unemployment rose to 6.0 percent and the state lost 7,500 jobs in October. This year, Minnesota dropped 25,900 seasonally adjusted jobs from January through October.
Gov. Pawlenty and other governors met with President-elect Obama in early December to discuss a possible economic stimulus package that may include aid for states facing budget deficits. It is estimated that 41 of the 50 states are expecting to face budget shortfalls next year. Governor Pawlenty has reacted cautiously to the plan, despite the fact that Minnesota ranked 46th in terms of receiving federal tax dollars per tax dollar paid, according to the Tax Foundation. Their report shows Minnesota received only 72 cents for every dollar sent to the federal government in 2005; however, neighboring North Dakota ranked 6th and received $1.68 for every dollar sent in. Minnesota should be getting its fair share of the federal budget outlays. Minnesotans also pay federal income tax..
State Economist Tom Stinson said Minnesota may take longer to come out of recession compared with the rest of the nation. Much of the state’s budget deficit has been created by falling revenues, not by government overspending. Cutting spending will not replace absent revenue. Only business and trade growth can do that. Some experts are projecting a loss of 77,000 additional jobs in 2009. Various legislative working groups, such as the Green Jobs Task Force, already are meeting to discuss how to create jobs in Minnesota both in the short and long-term.
Governor Pawlenty, in his state budget deficit resolution proposal, will not only cut state budget items but will work to drive more service costs toward local government. Under the guise of conservative fiscal restraint, he’ll continue implementing a public policy vision that strangles communities. In the short term, downward budget pressure may seem like a reasonable government limitation. The net result over time, however, is less than the sum of its parts. Our entire state becomes less safe and our quality of life declines precisely because aging communities have a lower property tax base and reduced capacity for public safety services. Fewer cops in one place eventually create crime problems in others.
The Minnesota Senate and House will need to work with the Governor to solve this crisis. We need to find growth strategies that will help bring Minnesota out of a true economic collapse. We ask all constituents to provide us with input on strategies and solutions that will maintain a quality of life we have come to expect in Minnesota.
One year ago, on December 3, I gave a speech at the DFL Endorsing Convention in New Prague hoping to land the endorsement for Senate District 25. Senator Tom Neuville had announced his resignation from the seat several weeks prior, paving the way for a Special Election to be held January 3. It was a night that I will not soon forget.
A few weeks prior to the endorsement, Ray Coudret, Earl Weinmann, Mark Thornton and I met to discuss the possibility of a Senate run. It seemed like the perfect opportunity: a short election with the incumbent out of the race? Time was also our biggest challenge. Would I have time to get my name out there? Could we raise enough money? Would people go to the polls for a special election? Could we do this over a 30 day period while most people were gearing up for the holiday season? I threw my hat in the ring. Our first goal was to win the endorsement.
Tuesday night, December 3, New Prague: Ray, Earl, and I arrived at the convention. There were about 70 delegates in attendance. I had been given a list of delegates the week before and I made a courtesy call to each asking for their support. There were three other very qualified candidates seeking endorsement. They had an obvious head start. The other candidates had already printed signs and had already raised money. Dozens of non-delegates were on hand to cheer them on. My brother had helped me design a logo, “Dahle for Senate” and we had splashed it on a half sheet of paper atop a letter asking for support. I pulled Earl and Ray aside and quietly suggested they hand out my “campaign literature.”
If I was going to win the endorsement, I was going to have to give a hell of a speech. Earl, my “press secretary” helped me write that speech. I used all 7 minutes to talk about education, health care, jobs, our environment, and quality of life. I talked about a common sense, bipartisan approach to government. I talked about staying in touch with constituents, listening to their concerns, and representing their values and beliefs in St. Paul. It was a heartfelt speech. The delegates responded and I took the lead on the first ballot.
The Question and Answer session followed. With Ray and Earl’s encouragement, I convinced a few more delegates that I could win in January. Eventually, I was endorsed on the sixth ballot.
Later on, the three of us walked across the street to Miller’s Bar. Our mood was of quiet excitement. We were exhausted and more than once we asked ourselves, “What do we do now?”
But things fell into place. December was a whirlwind. Ray became my campaign manager, Earl wrote the press releases, and volunteers like Hoover, Dan, Libby and a host of supporters from all over the district and the State helped launch a winning campaign and an upset victory on January 3.
I have learned much in my first session as a Minnesota Senator. As I look back, I am reminded of the importance of staying in touch, listening to concerns, reaching across the aisle, and representing this district with a common sense approach to governing. My constituents would expect as much, especially the 70 delegates who took a chance on me one year ago.