Woodard: Republicans Showed Fiscal Discipline, Democrats Won't

Minnesota Management & Budget’s (MMB) new state economic forecast provides even more proof of the fiscal discipline we restored to St. Paul during two years of Republican majorities in the Legislature. It also highlights the challenges that lie ahead for our great state.

Wednesday’s MMB report shows a $1.3 billion surplus, the third consecutive positive forecast. Combined, Minnesota has enjoyed a surplus of $2.5 billion over the last two years ($876 million in November, 2011 and $323 million last February). This is a remarkable turnaround from the $6.2 billion shortfall we faced in January 2011. 

The latest surplus funds allow us to fully repay K-12 funding which was deferred as part of a budget compromise in 2011. It also allows us to repay almost half of the K-12 payments the previous Democrat majority delayed. State law dictates how surplus funds must be appropriated. Thus, Governor Dayton will not be able to veto repaying K-12 funding as he did in the last session.

The report does forecast a $1.1 billion projected shortfall for the 2014-15 biennium. That deficit is based on a projected increase in state spending of 9 percent over the current budget. If we are able to keep spending in line with the 5-percent increase in projected revenues, then the deficit would be resolved.

It does not appear the Democrat majority will exercise fiscal restraint however. A public employees union is calling for a $6 billion tax increase. The governors' transportation task force is asking for a 40-cent increase in the gas tax and an increase in vehicle tab fees. His education task force is seeking a $1.8 billion tax increase in part through the implementation of a statewide $400 levy on property. I also fully expect Governor Dayton will make good on his campaign promise to push for an income-tax hike and broadening the sales taxes on goods and services has also been proposed. 

I have been asked to serve as the Minority Lead on the K-12 Education Finance Committee and will be serving on the Commerce, Ways & Means, Rules, Elections, and the Ethics Committee. I look forward to serving on these committees and representing you in the upcoming session. The $2.5 billion combined surplus we generated over the last year or so is a gift to the new Democrat majority from Minnesota taxpayers. I will be working hard to ensure this gift is not buried under a pile of new taxes and unrestrained spending.

Sincerely,
Rep. Kelby Woodard