Sen. Tony Lourey: In 10 months Republicans turned a $1.65 billion surplus into a $188 million deficit

Last session Republicans overspent on one-time, used temporary fixes for long term programs, and passed an unsustainable tax bill to benefit big tobacco and corporations. How do we know that? Well, a critical state budget ritual, last week’s release of the November Forecast, makes it pretty clear. The November Forecast updates legislators and budget experts on the state of the Minnesota and the national economies, the future outlook for these economies, and the projected impact this outlook will have on the Minnesota state budget. This forecast told us that in just ten months of leading the Minnesota legislature, Republicans turned a $1.65 billion budget surplus into a $188 million budget deficit. It’s a stunning, disappointing feat but one that wasn’t unexpected by regular capitol observers.

Instead of digging into the necessary policy and budget reforms this year, Republicans threw $900 million at insurance companies in an attempt to buy down health insurance premiums and overall insurance costs. While this strategy did reduce some health care costs for consumers, for now, it didn’t fix the long-term problems that are the real drivers of health care costs. Delaying action on the long-term challenges in health care increases the inevitable costs for both consumers and taxpayers. I don’t think anyone expected Republican legislative leaders to fix every problem facing the health insurance market, but their failure to chip away at even some of the smallest cost-drivers was completely irresponsible. Frustratingly, health care wasn’t the only area of the budget that Republicans wreaked havoc on for short-term gains, that will have big long-term consequences.

Over the next 10 years the Minnesota Republican tax bill will cost our state $5.1 billion dollars. This same tax bill focused the largest tax breaks for big tobacco and corporations. I said it during this bill’s debate in the Senate, and I’m here to say it again: working people, that’s who need a tax cut, not the very wealthy and big corporations. The bill had some redeeming qualities, but the Republicans’ eagerness to slash taxes resulted in the financial mess we find ourselves in today—facing a $188 million budget deficit, that budget analysts predict will grow to $586 million by next March.

On top of tax cuts for tobacco and big corporations the Republican budget also relies on one-time money to pay for ongoing needs. Another example of this one-time spending was on transportation. Republicans shortchanged our roads and bridges by dedicating only one-time money. Our aging, critical infrastructure requires big, innovative thinking, and ongoing stable funding.  A respected 2012 study showed us that over the next 20 years Minnesota faces a $21 billion transportation funding shortfall. Despite the obvious need, Republicans spent just $300 million in one-time funding on roads and bridges.  This places significant, additional pressure on a budget that is now in deficit.

It’s not hard to see how we got here. It has been four years since Minnesota faced a budget deficit. The only thing that’s changed in state government leadership over those four years is who is in charge of the legislature. Along with Gov. Dayton, DFL legislative leaders ended a decade of budget deficits and swings, now Republicans have launched us back onto that tumultuous rollercoaster. Minnesotans deserve legislative leaders that understand our job is to address the big and challenging budget issues we face in the future, not take short cuts that undermine Minnesota’s long-term needs and financial outlook.

Senator Tony Lourey
Tony Lourey represents District 11, which includes portions of Carlton, Kanabec, Pine and St. Louis counties in the northeastern part of the state.

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