You can usually count on accountants to tell you the bad news honestly. I sat down with a couple of straight-talking accountants late last month. Former state finance commissioners John Gunyou and Jay Kiedrowski worked for governors from both parties, and aren't running for anything.
They came to the Rotary Club and a local public forum to deliver some unvarnished bad news -- that our governor and state representatives have treated the funding of schools like deadbeat dads, and the state checkbook like drunken sailors.
Basically, the story goes like this: Back when Jesse was in office the state was flush, but it was a temporary situation. That didn't stop the governor or then-House Majority Leader Tim Pawlenty from doling the state savings account back to us in the form of refund checks and permanent tax cuts.
More than a few Best Buy shopping sprees were likely paid for with the refunds that set the stage for today's crisis.
During that same time, the Legislature decided the state, not your property tax, would start paying for the schools. This was a big promise: the equivalent of taking on $8,000 in new annual payments for a family making $80,000 a year.
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Their intention was good, but it sort of overlooked the fact they had no way of being sure they would ever have the cash. The state is a business that gets paid through sales and income tax -- a feast-or-famine cash flow about as predictable as that of a Vikings T-shirt vendor.
What happened in the few years that followed is a jaw-droppingly stupid tale of your politicians doing the easy thing instead of the hard thing. They patched things together with one-time gimmicks, thereby doubling a $2 billion deficit in the process, and then scrambled to come up with cash to pay the state overhead.
Specifically, they took a gargantuan reserve meant to do one thing (the tobacco settlement) and spent it on something else. That alone could get you divorced in a lot of marriages. They moved bills owed this year onto next year's ledger and moneys due next year into this year's books. If you were a corporate CEO, that could get you thrown into jail. They counted the fact of inflation when it was in their favor and ignored it when it wasn't. They paid for one year's worth of road work with a 20-year mortgage. "They borrowed one year of need," says Gunyou, "and put us in debt for 20 years."
We're talking about shell games that are legal for governments in this country but would get you marched in front of the cameras if you worked for a private company. As a result, Moody's accountants now see Minnesota as a less-worthy credit risk, ensuring our money goes less far for years to come. "It takes forever to get that rating back," says Gunyou.
"They keep patching the budget together with gimmicks," he said. "This year they need to honestly fix it. They need to either permanently raise revenue or permanently cut spending."
So, what's in store for this year?
For the next three years, the total dollars in the state budget for K-12 goes down. That's unprecedented. The truly scary thing is, even though they are doing that to the schools, they still have a billion dollar deficit ahead of them. The best-case scenario is a billion dollar deficit and less money for schools.
"I think the governor will be in a corner," says Kiedrowski, "where he will have to cut schools more, raise taxes or turn to public casinos to pay for services."
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Casinos to pay for schools? Aren't the Republicans supposed to be the party of traditional values? Yet the very next day after our talk, Pawlenty released a report asking for "a better deal" from the tribal casinos. "Welcome to Minnesota," our road sign may soon read, "where we fund our future with a fine array of craps tables."
Your Republican leadership and their foot soldiers in the house are following an agenda that is a far cry from the party's fiscally responsible, socially moderate past. What happened to good old Republicanism?
"I'd really like to know the answer to that," says Kiedrowski. "Maybe it's something about my generation of baby boomers. We were raised by the greatest generation, and we must have been spoiled so much that we think we can have it all and not pay the piper. That's the political mood in the party right now. They want it all."
Paul Scott of Rochester is a freelance writer.
