EDITORIAL: Minnesota’s budget surplus

Do you ever wonder why the state of Minnesota is either broke to the point it needs to severely cut services or is rolling in extra money? The answer is that few people in St. Paul want to plan beyond the next election.
Depending upon a lawmaker’s political stripe, he or she is either finding ways to spend every penny in the state’s bank account, or cutting taxes beyond the capacity to pay the state’s bills.
Both strategies shortchange voters. To better manage the billions of state dollars every year, lawmakers should:
l Follow generally accepted accounting principles. Businesses in McLeod, Meeker, Renville, Sibley, Wright and all other counties in Minnesota are periodically asked to pay both June and estimated July sales taxes in June. Why? Lawmakers want 13 months of sales taxes to spend each year. Since the Enron meltdown, corporations have stricter rules, and so should the state. Besides, cooking the books is wrong.
l Borrow money for long-term capital needs only. Taxpayers often hear about “bonding” projects. Bonding means borrowing. When the state borrows money on a 20-year note and the item it buys needs replacement only a few years later, taxpayers are paying for it and its interest too many times.
l Most importantly, plan more than one or two years in advance. When the economy cycles down — as it always does periodically — the state treasury will be able to draw upon a larger reserve. Lawmakers can avoid large tax increases or harmful cost cutting that angers voters.
l Factor inflation into the budget. Currently, the state has a $2.17 billion surplus, according to the governor’s office. Because it needs to pay for inflation in costs that aren’t figured into the budget, much of the surplus will disappear. With higher health care and energy costs, it is poor planning to believe no increase will happen. Businesses certainly can’t budget so irresponsibly.
The new Legislature goes back to work Jan. 3.