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How not to end the shutdown of Minnesota’s state government

Commentary by Mick Kelly |
July 14, 2011
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Minneapolis, MN - The framework agreement reached by Minnesota Governor Mark Dayton and Republican politicians is a victory for big corporations and Minnesota’s wealthy. For the rest of us, it is a setback. It is the opposite of what a progressive solution to the state budget crisis should be. The Republican shutdown of state government appears to be ending with a Republican solution to the budget short fall - the burden of the crisis will be shifted onto the backs poor and working people. Again.

While the many of the specifics of the budget will be worked out over the next few days, the broad outline of what’s intended is clear. Governor Dayton decided to take one of the pre-shutdown Republican offers, which means that payments to school districts will be delayed and bonds will be issued for tobacco settlement money. Dayton abandoned the approach of taxing Minnesota’s rich - even though that is what he campaigned on and why he got elected. Get ready for a wave of attacks on programs that serve working and low income Minnesotans. Health and Human Services will be the number one target for the proposed cuts.

That said, the future is unwritten. In the days ahead, it is vital that progressive forces work to torpedo the budget agreement and insist that cuts be voted down in the special session of the legislature.

Minnesota’s budget crisis did just happen. It is not an act of God nor is the result of ‘mistakes.’ Instead, it is a recurring, politician-made problem that gets worse every time there is an economic crisis. Since the mid 1990s corporate taxes have been cut. Individuals making big money have gotten break after break. The abolition of the corporate sales tax, the abolition of corporate property taxes, $300 million here another few million there (with local property taxes going up) and we arrive at a place where there is a budget crisis all the time. And for that matter, there will be one when the legislature meets next year.

While it is better to have funding shifts than cuts, all the shifts do is delay the day of reckoning. Take for example the funding shift that delays payments for schools. School districts will have to borrow money and pay interest on it to make up for the delayed state payments. The added costs will be made up on a local level. In the next state budget you will have a corresponding shortfall for the delayed state payment to schools (about $700 million) and you will a have the same reactionary politicians who endorsed this approach saying this is evidence that the state “is not living within its means.”

The only reasonable and progressive approach to the state budget is to tax the rich. The rich are the ones who have the money. Far from being job creators, the big corporations that lay people off are in reality job destroyers. The rich have done really well these past few years. They are the ones who should pay for the crisis.