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Without public investment, Minnesota will continue its slide toward mediocrity
7/22/2008 7:26 AM

Recently, representatives from the Invest in Minnesota Campaign, a coalition of faith, nonprofit, and labor groups, visited communities across the state to talk about how the inadequate level of investment, both in terms of human capital and infrastructure, is threatening our state’s economic future and our quality of life.

We heard stories about how residents in one community complained about the poor condition of their city street, but it was not fixed until the city’s emergency vehicles could not longer use it, young people graduating from Minnesota’s four-year colleges and universities with enormous amounts of debt, and, in every community, worries about the cost of and access to quality health care. And we’ve all heard about the cuts to the state’s district courts and public defenders and most likely stories will soon surface about delays in our justice system.

As investment in the public sector declines, we’re starting to see Minnesota drop in its national standing on livability measures and underperform the nation’s economy for the first time in 30 years. Traveling to communities helped us to hear first-hand what this means to Minnesotans and to talk about how we got here.

From 1997 to 2001, state policy makers made decisions about state budget surpluses. In that time $13 billion was spent on permanent tax cuts (including income, property and auto tab taxes) and rebates. But in the 2002 through 2005 legislative sessions, partly because of those huge and unsustainable cuts, the state faced deficits. The economic downturn meant things were tough for all states, but Minnesota’s deficit was made larger because of the permanent income tax cuts during the surplus years.

In response to these deficits, legislators and the governor relied on reserves, fund balances, budget gimmicks, and deep cuts to services. A no-new-taxes mentality held sway from 2003 on. There were no broad-based revenue increases to address the crisis, and the revenues that were raised through increases in tobacco and property taxes, as well as fees, were regressive. These short-term fixes continue to leave long-term problems unresolved.

In 2006 and 2007 there was a little turn around that allowed policymakers to restore some of the 2003 cuts. In the 2008 session the Legislature faced yet another budget deficit, the primary response to which was one-time measures and $268 million more in cuts.

And while early reports are that Minnesota will face another $1 billion budget deficit in 2009, some are now predicting that the figure may be as high as the 2003 deficit of $4 billion.

Regardless of the size of the deficit our state leaders will have tough decisions to make in 2009. And if recent history teaches us anything, unless we speak up and join a movement to change the state’s course and put more revenue on the table (yes, this means tax increases for those who can afford it), the disinvestment for the common good will continue in our state. With more cuts to education, health care, infrastructure, and economic development, Minnesota will not be competitive in this global economy, families will lack financial security, and the state will continue its slide to mediocrity.

Minnesota some day might no longer be known for the qualities Garrison Keillor celebrates, as the place where women are strong, the men are good looking, and all the children are above average. Imagine, instead, a Minnesota where young couples cannot afford a home because of college debt, where more people are tapping out food shelves, waiting for economic opportunity and justice, and the children cannot compete in a global economy.

We don’t have to let this happen. Our distinctive Minnesota formula of investing for the common good has worked for decades and we know it will lead to a brighter future.

The column was written by Growth & Justice President Dane Smith on behalf of the Invest in Minnesota Campaign. The other leaders of the Invest in Minnesota Campaign are: Marcia Avner, public policy director, Minnesota Council of Nonprofits; Brian Rusche, executive director, Joint Religious Legislative Coalition; and Ray Waldron, president, AFL-CIO. They have combined efforts to form the Invest in Minnesota Campaign because they believe that Minnesota’s fiscal course in recent years is diminishing the quality of life in our state and that we need more revenue, we need to raise it fairly and we need to invest in Minnesota.