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The Minnesota Business Partnership called for tax relief for Minnesota businesses. Of course. The Minnesota Housing Partnership proposed immediate and meaningful investments in housing. Also, of course. And, to the surprise of no one, Laborers International of Minnesota said fixing Minnesota’s infrastructure was a priority while the National Alliance of Mental Health said mental health was most pressing for state funding.
On and on it went last week after Minnesota Management and Budget released a new economic forecast projecting a state budget surplus of $17.6 billion. Not only is this a record surplus, it’s a record by a lot, nearly double the surplus of more than $9 billion in February.
So, with needs aplenty and with responsible investment pretty much ignored this election year by the Legislature, of course politicians and special interests galore lined up to offer opinions about how to spend, save, give back, and more with the big surplus. And no wonder many had their sweaty palms out already, eager for a share.
With millions also in federal COVID-19 relief still unspent in Minnesota and tax receipts expected to climb higher in coming years as the economy improves and continues to rebound, there’s enough cash, it seems, to accommodate every wish list out there.
Final decisions will be made by DFLers. After the November election, the party controls the Minnesota House, state Senate, and governor’s office. Without political checks and balances, Minnesotans can call on DFLers to show restraint and to act responsibly. Early-on comments suggest their intent.
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“I look forward to working right away this January to help ensure lawmakers take full advantage of this historic opportunity to boldly invest in workers, families, and communities,” Rep. Liz Olson, DFL-Duluth, the incoming chair of the House Committee on Ways and Means, said in a statement. Did “take full advantage” and “boldly invest” jump out at you, too?
Returning some of the surplus to overtaxed taxpayers needs to happen first, as a News Tribune editorial also urged in March at the occasion of another record surplus. Encouragingly, that remains a priority of Gov. Tim Walz, who called this most recent surplus “proof that Minnesota’s economy is strong and growing.”
“The case for sending money back to Minnesotans to help with rising costs has never been stronger,” the governor said in a statement. “Together, we have a golden opportunity to do that while also investing in our workforce, our schools, and our kids — all while lowering costs for our middle-class families, small businesses, and seniors.”
A return of surplus to taxpayers needs to happen, Senate Majority Leader Jeremy Miller, R-Winona, said in March, because, clearly, "The state of Minnesota is overtaxing the people … at a time when they're struggling with record inflation.”
We deserve some of our money back, and lawmakers can be assured that the vast majority of us will spend it, stimulating the economy even further.
Also stimulating, against the backdrop of a windfall, would be permanent tax reductions, especially for working Minnesotans. Specifically, the state can eliminate its Social Security tax and cut tax rates. As Sen. Justin Eichorn, R-Grand Rapids, said in a statement last week, “Minnesotans know how to spend their money better than bloated government.”
“Legislators have an obligation to act responsibly on behalf of our economy and our people,” Minnesota Chamber President and CEO Doug Loon implored, also in a statement. “After nine consecutive years of budget surpluses, Minnesota should join other states in meaningful tax reforms to encourage investment and create opportunity for our state.”
Minnesota Business Partnership Executive Director Charlie Weaver offered a wise word of warning at last week’s announcement: “Lawmakers should be cautious about committing the state and its taxpayers to new permanent spending that would lead to future deficits.”
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Minnesotans can be grateful that a fiscally responsible state law is already dictating that a percentage of any surplus, including this one, goes into the state's reserves. Money in the bank is almost never a bad idea. The future is unknown. Our current economic fortune won't last forever. Saving during times of prosperity is responsible.
With additional cash now available, investments certainly should be made, in particular in Local Government Aid, where state funding hasn't kept up with inflation; to address homelessness and rising real estate prices, both of which are crises in Duluth and across the state; to help make child care more accessible and affordable, another crisis; and to replace lead water pipes. Those are among many critical needs.
The Legislature this year didn’t even pass a bonding bill, once the only reason sessions were held in even-numbered years. Duluth projects in need of state money — whether from bonding, the surplus, or elsewhere — include the restoration and renovation of the historic Duluth Armory, Spirit Mountain improvements to solidify the attraction's bottom line, and safety repairs to the Aerial Lift Bridge.
The specifics in all of this are what will matter most. With cash on hand, like Scrooge McDuck's pool of money, and with every politician and special interest eager for a share, expect fierce debate — and plenty of ugly petty politics, too, even though the DFL is in charge everywhere and even though there's so much at stake that's so important to so many of us.
This Minnesota Opinion editorial is the opinion of the Duluth News Tribune Editorial Board.
