Column: Better bonding bill amount? Zero
By SCOTT HONOUR
We all know there’s no such thing as “free money.” How come the politicians in St. Paul don’t?
With their new $1 billion bonding bill, Gov. Dayton and the DFL Legislature will raise total state indebtedness — that’s total bonding and other debt of $10 billion, plus our $17 billion in unfunded pension liabilities — to an unprecedented $27 billion. The state’s credit card is pretty well maxed out.
In contrast, Minnesotans have taken the opposite approach since the recession, and for good reason. U.S. household debt is down 9 percent since it peaked in 2008.
Gov. Dayton’s approach is irresponsible for two key reasons. First, he is jeopardizing our economy by creating an even larger interest obligation, which will shrink the dollars available for the private sector to use to grow and create jobs. And second, he is placing an even greater burden on the next generation of taxpayers who will have to pay back these very large and growing debts.
In St. Paul, as in Washington, D.C., the bills are coming due.
A better amount for a bonding bill this year is zero, not $1 billion. For any critical priorities that require funding, use the budget surplus. If borrowing from future generations to spend it on politicians’ pet projects were the key to prosperity, the streets would be paved with gold. Instead, our economy is stagnant and our debts have skyrocketed.
With state government already spending, after accounting for inflation, two-and-a-half times more per citizen than it did in 1980, maybe it’s time for Gov. Dayton to admit his way hasn’t worked, rather than trying to do more of the same.
If it weren’t so serious I’d chuckle at Gov. Dayton thinking he’s being fiscally responsible for borrowing “only” $1 billion because, after all, there were $5 billion in requests. Next he’ll claim to have “cut” $4 billion.
Beyond the debate over appropriate levels of borrowing and debt, the bonding discussion is part of a more fundamental difference in the approach I’d bring from spending my life in the private sector versus that of Gov. Dayton and politicians in general. The governor and too many legislators in St. Paul start by picking an arbitrary dollar amount to borrow, with the view that more is always better, and then choose what to spend it on.
My approach is to set priorities based on the things we need to accomplish, determine which of those solutions requires funding (because not all do), then think about funding needs in a comprehensive w \ay, not this piecemeal approach favored by politicians. These two approaches couldn’t be more different.
In the regular quest for more spending, politicians have broken the budget down into separate and distinct pools. General fund. Legacy fund. Dedicated transportation fund. Bonding bill. All of which have separate missions and none of which — surprise, surprise — ever seem to have enough money to satisfy the big spenders. But to most of us, these pools of money look like they have more than enough, especially when you look at the things they spend it on.
The bonding bill is supposed to be for projects that have statewide significance and which require more funding than can be practically raised in a single budget period. Instead, many items look a lot like the Washington, D.C., earmarks designed to help the election prospects of vulnerable legislators. Snow making equipment for a ski resort? A $50 million planetarium at the U that they didn’t request? Sports arenas? Building construction for public radio?
Bonding bills and dedicated funding streams are nothing more than a means to duck responsibility and avoid setting priorities. Politicians seem to have the attitude of “Don’t want to put a project in the state budget because we have to meet a balanced budget requirement? Throw it in the bonding bill.”
I have a better idea for ending politics as usual: Set priorities. The longer Minnesota goes without reforming state government, the more we’ll rely on new dedicated taxes and borrowing. We know we have significant transportation needs; we’re short $10 billion according to MnDOT. Well, let’s plan for it. It’s a core function of government. We shouldn’t have to borrow from our kids to do the basics today.
Government should do fewer things, but do those important things well. If we stopped wasting money, we’d have more left over for real priorities, like roads and bridges, public safety, education and giving help to the truly needy. If we did that, we wouldn’t have to keep running up this huge debt.
As governor, I’ll use my businesslike approach to fund our priorities while we shrink the scale of government. We will continue to reallocate those dollars to get ahead of the curve in funding the infrastructure we need for a prosperous future and actually pay down our state debt. More importantly, this approach will create a sustainable future for Minnesota and a positive cycle of economic growth and job creation.
Ending the “we’ve always done it that way” mindset will be one of my top priorities as governor, because I know that doing so will make our state better for everyone.
Scott Honour is an Orono businessman and a Republican candidate for governor.