July 19, 2011

MN Has Purchased Only a Little More Time

Eileen Norcross

Senior Research Fellow

With Minnesota getting closer to fully re-opening its government, a deep divide has emerged over how to create a budget and support services as spending has grown in Minnesota over the past several decades, in particular in education and Medicaid. It is not unlike the fundamental philosophical divide at the center of the debt-ceiling debate. Do we support growing costs with more debt or do we cut costs by rethinking and restructuring what government is providing?

Rather than trying to engage in this debate, Minnesota has attempted to balance its budget by trying to reconcile two different views on the size of government.

Spending growth can be supported by evasive techniques at least for awhile and people may be lulled into thinking you can have it all – lots of services and low taxes. One-shot and short-term revenue sources eventually dry up, leaving politicians with the unenviable choice of cutting programs or finding more revenues. Minnesota’s government has only purchased a little more time.