Editor's note: The following piece was also published today on the Star Tribune's Your Voices forum.
This morning, state economist Tom Stinson delivered Minnesota’s budget forecast. As expected, the news is bleak indeed: The projected shortfall is $6.6 billion in the coming three years – roughly $3,100 per Minnesota household.
By the time this bit of commentary arrives online, much attention will have been devoted to interpreting whether Minnesota’s revenues are too little, our spending too high, both or neither, and who is primarily to blame. I’m interested in each of these questions, but focusing on them alone is not the way forward.
As the Star Tribune reported last week, Stinson has called our situation a “structural budget deficit,” meaning our mechanisms to collect public funds don’t provide for the public services we demand and consume. Stinson has said there’s no practical way we can rely solely on cutting services or raising taxes. But let’s just say Minnesotans insisted just on reducing services to cover this shortfall. The amount to be cut would equal four years of general fund appropriations for higher education. It would equal seven years of state public safety funding. That amount would equal 48 times what we spend on economic development from the state’s general fund. The structural deficit will take more than one-time fixes: It will require a structural solution derived from the creativity and consensus for which our state earned a national reputation.
Part of the structural budget deficit is attributable to the way we have developed our places. Over many years, we subsidized housing development with sewer and water infrastructure, roads, streets and highways, and a cornucopia of other services. It’s a development pattern that costs too much to build, maintain and operate when compared to the benefits it produces. It’s inefficient and can be found all over our state.
We depend on infrastructure to create jobs, educate students and everything else. When this infrastructure serves an inefficient pattern of development, we stick ourselves with the bill. And the bill is paid in private and public funds we could otherwise use to start businesses, improve houses, deposit in banks to be loaned in our communities, and fund community priorities.
The objective of Strong Towns is to support a model for growth that allows our towns to become financially strong and self-sufficient. To succeed as a state, we need our individual places to work well and be productive in creating quality of life, jobs, housing, and education. We have to do it all, and do it well, and that requires a structural solution to the state budget that starts with efficient places.