Insatiable – \(,)in-’sa-she-bel\ – incapable of being satisfied: QUENCHLESS [Merriam Webster's Collegiate Dictionary, Tenth Edition, 1994]
The big story this week was the release of the February forecast. It projected more surplus for the current biennium. Combined with the similar news from the November 2011 forecast, state government has:
- replenished its cash flow account,
- replenished the budget reserve, and
- made a down payment, albeit small, on the school shift.
We have not solved the fiscal problems of this state, but if two points define a line then it’s a good trend. These two relatively optimistic forecasts are a result of last summer’s “shameful“, “extreme“, and “un-Minnesotan” budget – the budget that reduced spending and was passed by people “who seemingly understand little about government and care even less.”
(Maybe they understand a wee bit about government, hmm?)
So… we find ourselves with a fragile return to fiscal common sense. Why would anyone risk it with more spending? Long before the latest Vikings stadium plan (that’s another post, but the short answer: just don’t do it), Governor Dayton issued a bonding proposal.
The highlight? $1.5bn in total spending requests, of which…
$820K is general obligation bonds
$285K local match (probably sourced with local borrowing)
$288K from federal match (likely sourced with generational borrowing) … for a total of …
$1,393,327,000 (the remainder is made up of requests from other consolidated funds and user fees)
To keep this proposal in perspective, there was about $1.2bn in black ink from the last two forecasts, so this proposal digs more dirt out of the hole partially back-filled in November and February.
Wait, wait… there’s more. In the Governor’s proposal for bonding in 2012, there were 86 requests; 29 of those requests (one third) received funding in the 2011 bonding bill. One of out three requests from last year need money already? Or again? Isn’t bonding for capital projects and/or emergencies?
To make these observations more interesting, the state has about $1.8bn in reserves and another $1.6bn of funds with a “budgetary balance.” If you read the state’s CAFR [Comprehensive Annual Financial Report], the state has a fair amount of money laying around. Granted, this isn’t money analogous to being found in the couch cushions or a forgotten coat pocket; most of it is statutorily directed. But when those statues align with the purpose set out in bonding, why are we pulling out the state’s credit card?
The Governor requested $5 MILLION for “Parks and Trails Development.” This is specifically covered by the MN Constitutional misuse “Legacy” amendment fund called “fund 353 – Parks and Trails.”
I found at least $51mn of bonding requests that could possibly be paid for with other state dedicated funds. There’s another $270mn of “local government projects” that are pure pork. It’s interesting that some of them have been proposed in districts represented by Republicans, as if daring those representatives and senators to vote against them.
Finally, the FY12-13 debt service is $1,588,219,000 [page 9-10]. Dayton proposed to borrow/spend almost as much as we owe. Where’s the common sense to borrow an amount equal to what is owed on a mortgage, students loans and/or credit cards?
Borrowing is spending by a different name. I’ve heard conservatives refer to new revenue sources as “feeding the beast.” After reviewing Governor Dayton’s bonding proposal, I doubt “the beast” can be satiated. If there is any bonding bill this year, I urge the Legislature to follow the intention of borrowing – long-term infrastructure and emergency response.