Stoneage Ramblings

By John R. Stone

With control of the governorship, state House and Senate I’m sure Democratic leaders are looking at their unique situation. They have control of the state purse strings and there is a surplus of money to deal with.

Republicans, who had played hard ball last spring and put the kibosh on any extra spending now find themselves on the outside looking in.

I would hope that Democrats are wise and take actions that benefit the state as a whole not just in where the money gets spent but also as it affects Minnesota’s financial future.

The first step in my mind is to understand how the surplus developed and whether or not it continues into the future. I suspect some of the surplus came from sales tax revenues generated as people spent their COVID relief payments in 2020 and 2021.

If income tax rates turn out to be too high and the source of the surplus, it might be worth considering reducing tax rates. If not, if the surplus may be a one-time “gift” and needs to be spent wisely.

A recent article in the StarTribune highlighted a request by the Minnesota Department of Natural Resources for $300 million made last year to upgrade boat ramps and other public DNR facilities.

Maybe that kind of thinking should be expanded to other state property, fixing it up so that it will be easier to maintain in the future. If a good job were done with that it could lower what the state needs to allocate in the future for heating, lighting, cooling and other ongoing expenses or at least reduce the rate of increase.

More efficient lighting, more efficient heating and cooling systems, insulation, better windows and a host of other improvements could keep the state’s costs for heating and cooling down in future years, saving money for other state expenses. In that sense the investment would be a gift to the state’s taxpayers.

Given their past histories Republicans will want tax cuts and Democrats will want to create new or expand existing programs. If tax cuts can be justified because current rates generate surpluses, fine. If new programs can be justified as being affordable going forward, they can be considered as well. But the goal with the surplus spending should be to make investments in the future that will reduce the rate of increase in state expenses.

We should not forget what about happened a couple of decades ago when we had a surplus. Jesse Ventura was governor then and he came up with what he thought was a reasonable proposal. The surplus was divided three ways between Democrats, Republicans and the governor.

Republicans went for tax cuts, Democrats went for programs and the governor sent his money back to taxpayers.

Just a year or two later there was the .com recession. State revenues dropped and the budget was out of balance, too much expense, too little income. The Republican tax cuts had the same effect as Democratic programs, one cut state revenue, the other increased state expense. Rather than undo what had been done, the result was the state cut aid to cities and counties so those governments raised taxes. So much for the tax cuts, we just paid more in property taxes and we saw local programs cut.

Neither Republicans nor Democrats have a monopoly on good ideas. I would hope that they all could sit down and look ahead, not just to the next election in 2024, but for a decade and beyond. We have an aging population, a shortage of workers, we’re dealing with changes in our climate that are changing things in ways that cost money.

Where is our revenue coming from in 2023? What is our education system dealing with, are there fewer college students and more wanting to learn trades? Will we still be raising corn and soybeans? What about our health care system?

There is a lot to ponder for the future! We’ll never be prepared if we don’t start now. I think this surplus is a gift, and if used wisely, can make our transition to a new future much less traumatic. Our leaders must look ahead and plan and spend wisely.