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.