State Representative Phil Sterner

Midway through my first session as your State Representative, economic issues continue to dominate our discussions. Minnesota is facing a $6.4 billion budget deficit unlike any in our state’s previous history, while job losses are at the highest level since 1983. This perfect storm has left thousands of Minnesotans struggling to hang on to the lives they’ve built for themselves and their families.

These unprecedented conditions are the backdrop of our work to craft Minnesota’s state budget for the next two years. Saving and creating jobs must be the centerpiece of any budget we pass. Equally important is stabilizing our state’s financial picture for the long term. Perhaps the highest priority is finding new ways of delivering essential government services, because the old way of doing things just doesn’t cut it anymore.

As of last week, the House, the Senate and the Governor had all released their budget proposals. Now we’re in the process of finding where our approaches match, and where we need to reconcile competing ideas. I thought it might be useful to look at the three budgets proposals. Then I’d like you to contact me with your thoughts about which approach makes the most sense to you.

The Governor’s plan uses a combination of cuts to health care, city and county aid, along with education payment shifts. He also includes revenue in the form of $1 billion in long-term borrowing and uses one-time federal stimulus money to pay for ongoing funding needs. He provides a slight increase in school funding with a new mandate that requires Q-Comp in every school district and a new pay-for-performance plan. While the Governor’s plan does not include an increase in state taxes, his own Department of Revenue stated that the plan would increase property taxes more than $625 million in 2010, and would leave a budget deficit in excess of $2.5 million two years from now.

The Senate plan is a straightforward combination of across-the-board budget cuts and unspecified tax increases. To their credit, the Senate plan balances the budget for the long term and doesn’t leave a deficit two years from now; however, the 7% cut from every area doesn’t prioritize certain needs over others. At the very minimum, the Senate proposal would mean $1 billion less for schools – almost certainly leading to teacher and other school staff layoffs and increased class sizes.

The House uses a combination of strategic spending cuts – the largest percentage coming from state government. Federal stimulus money, delayed payments to schools and a progressive revenue increase make up the rest. The House proposal prioritizes education by protecting early childhood, K-12 and higher education from budget reductions, creates a small surplus for the next biennium, and replenishes the state’s depleted budget reserves.

While there are significant differences in the three approaches, several similarities stand out. Everyone agrees that we can’t just cut our way out of this mess. And everyone on both sides of the aisle agrees that in order to provide the things that Minnesotans expect from state government – good schools, safe communities and access to health care – more revenue is needed, whether we borrow it, bond for it, or raise it through economic growth or other means. The challenge will be to find revenue that both sides can agree on that is fair, predictable and sustainable.

On issues as important as this, we need to keep the lines of communication open with both sides of the aisle and with the Governor in order to find a compromise that all sides can support. When I came to the Legislature, I pledged to work in a bi-partisan fashion to build consensus. At the end of the day the Legislature writes the legislation and the Governor has to sign it. That means we’ll all have to work together, compromise and focus on the best interests of all Minnesotans – now and in the future.