2010 Legislative Session

The good news was that the last-minute, session-ending solution had no tax increases and balanced a nearly $3 billion current deficit. The bad news was that after almost five months, little long-term budget reform was even considered.

The budget deal enacted the Governor's 2009 unallotments on a one-time basis, and ratified the $1.8 billion K-12 aid payment shift that will begin to be paid back beginning in 2011. As part of the plan, Pawlenty agreed to approve legislation authorizing the current or next governor to have the state opt in to an early expansion of Medicaid enrollment. There is also $10 million in extra funding for General Assistance Medical Care, but no surcharges on health care providers. A potential $408 million in enhanced Medicaid match funds that the DFL had been counting on will be used to bolster the state's cash flow. Most lawmakers were pleased that it also guarded against nursing home and further public safety cuts.

While the 2010 session began with most lawmakers promising to protect taxpayers and fight to create jobs in a struggling economy, the final hours of the session became the same old story when the DFL again proposed a new fourth income tax tier -- the fifth highest in the nation -- to close the budget gap. The tax increase had nearly a half billion dollars in new taxes that would fall heaviest on our small businesses. At a time when Minnesotans continue to struggle in a fragile economy, tax increases are not the answer. The measure was fortunately vetoed.

The session was woefully short on budget reform. Legislative leadership chose to ignore the future liabilities of the state and continue to deficit spend. The budget deal was a bandage -- instead of reforming government, we will leave the future shortfall to a new legislature and governor.

2010-07-23