Lawmakers still fighting budget battle

Sen. Majority Leader Tom Bakk and House Speaker Paul Thissen listen to an MMB presentation.

The 2013 legislative session ended more than two months ago, but the partisan bickering over state government finances is still going strong.

The latest dustup came today during an interim meeting of the Legislative Commission on Planning and Fiscal Policy. Minnesota Management and Budget (MMB) officials reviewed their report issued two weeks ago that showed tax collections exceeded expectations by $463 million in the fiscal year that ended June 30.

Rep. Mary Liz Holberg, R-Lakeville, noted that recent improvements in the economy actually happened under the two-year budget that Republicans passed without tax increases in 2011, when the GOP controlled the House and Senate. Holberg suggested that the budget and tax increases passed this year by DFL legislators could result in reduced revenues if businesses and individuals leave the state.

“Now we’ve done the 180,” Holberg said. “We’ll watch over the next two years to see what the effects of that radical change in fiscal policy is on the health of the state. But I think there are some risks.”

MMB Commissioner Jim Schowalter said he believes the next biennium will bring less risk and less uncertainty. House and Senate Democrats have made a similar point. They insist that their budget will bring needed stability to state finances after years of recurring deficits.

House Speaker Paul Thissen, DFL-Minneapolis, took issue with a GOP claim that rising property taxes will soon hit a record high. Thissen said taxes on existing properties are actually decreasing, and he said an anticipated overall increase is the result of new construction.

“If we would have kept the last budget in place and how we dealt with property in the last budget, property taxes would be going up $181 million,” Thissen said. “So, significantly more than they’re going up under the current situation.”

Lawmakers also learned that the revenue balance for FY 2013 is likely to get better. Outgoing State Economist Tom Stinson told the panel that the number could top $500 million when final calculations are made next month. Under legislation signed into law this year, the closing balance will be used to reduce the $874 million owed to school districts from earlier budget agreements.