PoliGraph: House DFL leader’s deficit math adds up

Now that the Legislature has adjourned for the year, campaign season is underway.

Democrats say they intend to regain control of the Legislature. House Minority Leader Paul Thissen is among the party’s loudest cheerleaders, writing in the Star Tribune that a DFL Legislature would adopt policies that help middle-class Minnesotans, that strengthen education and that balance the budget.

On the last point, Republican legislators don’t have a great track record, Thissen wrote.

“In February 2011, when the Republicans took charge, the budget deficit was about $5 billion,” Thissen wrote. “In January 2013, when the next Legislature returns to St. Paul, the budget deficit will be more than $4 billion.”

Depending on your politics and your accounting, there are multiple ways of looking at the coming biennium’s deficit, and Thissen’s is just one perspective.

The Evidence

Minnesota is expecting a $1.1 billion shortfall in the coming biennium, according to Minnesota Management and Budget’s latest forecast.

But that figure doesn’t include two other important numbers that Thissen’s estimate does.

According to the same MMB forecast, the state can expect to spend an additional $1.06 billion in inflation in the coming biennium. Previously, the state’s deficit included inflation projections, but the law no longer requires it.

The state also owes roughly $2.4 billion to public schools to correct a payment shift it enacted to balance the current budget. Current law doesn’t require MMB’s deficit projection to include this debt either.

So, is Thissen’s take on the deficit fair?

Wayne Simoneau, who served as Finance Commissioner under former Gov. Arne Carlson and is a former DFL legislator, says the deficit can legitimately be argued both ways.

Thissen’s number “reflects the real world obligations of the Legislature and the finance department,” Simoneau said. He said MMB’s projection “complies with state statute.”

If he were doing the calculations, Simoneau said he would include inflation and the school payments to portray the deficit more accurately.

Former MMB Commissioner Tom Hanson, who served under Republican Gov. Tim Pawlenty, agrees that inflation should be included in deficit projections.

But the school payment shift is murkier, and Republicans would probably disagree with Thissen’s projection because many don’t believe schools must be paid right away, Hanson said.

The debate over borrowing money from schools “has become more a philosophical debate on whether the shift is a debt that needs to be immediately paid off versus something that can be paid off over time,” Hanson said.

Nevertheless, he doesn’t believe that Thissen’s statement is misleading or false.

The Verdict

Issuing a ruling on this claim is tricky. On one hand, Thissen is using a higher number to describe the deficit to make a political point.

But just because law doesn’t require inflation and the school payments to be included in the deficit doesn’t mean the state doesn’t owe that money. Two former MMB Commissioners agree that the state’s deficit could legitimately be argued both ways.

As a result, this claim leans toward accurate.

SOURCES

The Star Tribune, Minnesotans, bring back a DFL Legislature, by Rep. Paul Thissen, May 20, 2012

Minnesota Management and Budget, February 2012 Forecast, accessed May 25, 2012

E-mail exchange, Mike Howard, spokesman House Minority Leader Paul Thissen, May 24, 2012

Interview, John Pollard, spokesman, Minnesota Management and Budget, May 25, 2012

Interview, Tom Hanson, former MMB Commissioner, May 25, 2012

Interview, Wayne Simoneau, former Finance Commissioner, May 25, 2012

  • Licorice Stick

    The commentary in this polygraph is not accurate. It is true that the total amount owed schools was $2.4 billion. However, the current budget solution accounted for $700 million of that number. Where did the remaining $1.4 billion of school debt come from? The DFL majorities enacted this shift when closing previous budget holes with GOP Gov Pawlenty.

    Revenues coming in to the state are overprojection, allowing for repayment of $318million to the schools. Not only that but the cash flow and the

    Budget reserve accounts that had been emptied out by the previous DFL controlled legislature have been repayed as well.