Senator Reinert’s view: Keep state spending expectations low

[Originally published at Duluth News Tribune]

The Legislature is entering the third week of what probably will be one of the shortest sessions in years. While the Minnesota Legislature will complete work on a number of key issues — particularly, passing a comprehensive bonding bill and an increase in our state’s minimum wage — not starting until late February meant, at maximum, a 2½-month session. And odds are it will be even shorter. This is great news for those of us who don’t live in the Twin Cities.

That condensed timeline, however, also will require a good deal of managing expectations for many others. There simply will not be enough time to tackle the many issues citizens and interest groups typically bring to St. Paul.

On Friday, Feb. 28, the Minnesota Management and Budget Office released the February forecast. The numbers proved what many already expected: The state of Minnesota is operating with a surplus of $1.2 billion. This surplus is after the K-12 shift was fully repaid. With the surplus undoubtedly comes a variety of spending suggestions.

I’d like to offer a couple suggestions of my own.

First, we need to repeal the business-to-business taxes that were part of the 2013 Omnibus Tax bill. These taxes put border businesses at a distinct disadvantage, and the warehousing tax is especially detrimental to the port of Duluth.

And as we look for ways to strengthen Minnesota’s fiscal ship, let’s not forget that our state government made some questionable short-term decisions in the not-so-distant past in order to balance the budget. In 2011, Minnesota borrowed $640 million against future tobacco-settlement payments. While this move provided one-time money and together with the K-12 shift ended the state government shutdown, it came with a hefty cost. The $640 million borrowed in 2011 is expected to cost the state up to another $500 million in interest. That means Minnesota taxpayers will pay nearly double by the time the money is paid back. With the state in good financial standing, now is the time to pay off this outstanding obligation.

My final suggestion is that we put any remaining budget surplus into our state’s “rainy day fund.” You may have heard our Senate Majority Leader Tom Bakk urging caution about spending the surplus, and I agree. Now that our state has enjoyed more than a year of steady economic growth, we must make our reserves safer and more secure. There will be another economic downturn at some point in our state’s future. Let’s be better prepared than we were during this last recession.

While managing your expectations is the correct frame of mind to have during this legislative session, there will be investments. The Capital Investment Committee is considering a number of significant Duluth bonding projects. My top priority is the Spirit Mountain waterline project. It’s good for the city infrastructure, good for the environment and good for Spirit Mountain’s bottom line. The NorShor Theatre also is requesting bonding money along with the University of Minnesota Duluth, Wade Stadium, Lake Superior Zoo and Lake Superior College. I will be doing my best to support all of these local projects.

Senator Roger Reinert
Roger Reinert represents District 7, which includes St. Louis County. He is also an educator.

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