Budgeting 101
Much is being made about Rep. Emmer's & Sen. Dayton's budgets so I thought I'd put a little something together on the subject.
First, it's important to note that the budget bills signed by Gov. Pawlenty have spending projections for the 'out years'. These projections are known as tails. The next legislature may or may not increase spending as much as the tails call for. They're under no obligation to spend the amount that the tails call for. In fact, it isn't often that they're followed.
Next, it's important to understand that the people who put the budget projections together can't forecast based on what they think the legislature and the next governor might do. Their projections must be based on the size of the tails since they're signed law.
The legislature will have to deal with the education shifts to schools. That's another key component of this budget forecast. Again, the next legislature isn't obligated to restore this money. That said, it's likely that these funds will be restored regardless of who's elected this November.
Obviously, revenues have to be calculated. These calculations must be based on existing law.
The Minnesota Department of Revenue has general guidelines that gives a candidate like Mark Dayton or Tom Horner a rough estimate of their tax increases.
The truth is that the legislature isn't obligated to spending a penny more than they did in the 2010-2011 biennium. In fact, the next legislature and governor can choose to spend less.
That isn't my policy recommendation. It's just a budgeting statement of fact. Because of that truth, Tom Emmer is exactly right in questioning the size of the deficit.
He isn't saying that there won't be some difficult choices and difficult votes to be taken. He's simply saying that there's no way of knowing the size of the deficit because of the possible savings from the reforms he hopes to pass.
Tom Horner and Sen. Dayton are having vapors over Rep. Emmer's unwillingness to admit that there's a $5.8 billion deficit. That proves they haven't thought about the possibility of not keeping the budgeting on autopilot.
Tom's the only gubernatorial candidate who thinks legislators should think in terms of spending what's needed, not last year's amount plus more.
That's a revolutionary concept to career politicians like Sen. Dayton. It's time Minnesota trashed baseline budgeting and started using zero based budgeting. It's time they put Minnesotans first instead of government first.
Comments welcome at LFR.
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