News Highlights

Experts criticize state budget approach at local forum

2006-04-09

By Mark Fischenich, Free Press Staff Writer [published in The Free Press, Mankato, MN]

NORTH MANKATO â€" State leaders have made a mess of Minnesota's budget while failing to level with Minnesotans about the gimmicky and short-sighted tactics they've been using in recent years, according to two self-described fiscal conservatives from the Perpich and Carlson administrations.

Speaking to a large crowd of civic leaders at South Central Technical College Wednesday afternoon, John Gunyou and Jay Kiedrowski began their presentation with a quote from President "Give 'em Hell Harry" Truman.

"I never did give anybody hell," Truman said. "I just told them the truth, and they thought it was hell."

The truth, according to Gunyou and Kiedrowski, is that Gov. Tim Pawlenty and state lawmakers - despite painful budget cuts, increases in fees and tuition, reductions in state aid to schools and cities, and depletion of a $1 billion endowment for smoking cessation and health education programs - have never fixed the state budget deficit.

Instead, they pushed the problem onto property taxes and off into the future while cutting investments in education that have been a large party of Minnesota's economic strength, the two former finance commissioners said.

Minnesotans must force state leaders to honestly address the problem, or it will get much worse than it already is and will threaten the state's long-term prosperity.

"The same people running the state today created the problem," said Gunyou, who served in the Republican administration of Gov. Arne Carlson.

The state's finances are in such poor shape that Minnesota is in danger of being forced to borrow money in the short term to make payroll and to make its scheduled payments to schools and cities. If that happens, Minnesota - which already lost its Triple-A bond rating from Moody's Investors Services - will be downgraded by the other rating agencies as well, they predicted.

They also said that the 2005 Legislature, which convenes in early January, is probably facing another budget deficit that will top $1 billion.

The official revenue forecast that will be released in early December might show a projected shortfall of about $400 million, Gunyou said. But that's only because the Legislature wrote a law requiring the state's economists to pretend that inflation doesn't exist when it comes to the cost of the goods and services the state purchases - even while assuming inflation does exist when it comes to higher income taxes the state will receive due to cost-of-living adjustments in workers' wages.

"This is the forecast forward for four years," Gunyou said, running through the specifics of a no-inflation assumption. "The teachers will never get a raise. The price of the gasoline going into the school buses will never go up ... This is, I think, close to criminal. You're lying with the forecasts."

Kiedrowski, who served in the Democratic administration of Gov. Rudy Perpich, said his and Gunyou's primary message isn't to push a particular policy for solving the problem such as raising taxes or slashing spending. They just want the problem fixed in a legitimate way.

"No gimmicks. No more gimmicks, period ...," he said. "It's the only right thing to do."

Gunyou, now the city manager of Minnetonka, and Kiedrowski, who teaches at the Humphrey Institute of Public Affairs, said they have made their presentation at no charge to numerous groups around the state.

"We're doing it because we care," Kiedrowski said, noting that all but one of his grown children still live in Minnesota. "What kind of Minnesota do we want to leave our children?"

A version of the presentation by Gunyou and Kiedrowski - and specifics about the tactics they criticize - are available on-line at Gunyou.com.

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