Advice from the wrong direction
Local units of government have been getting a lot of complaints and a lot of advice from legislators lately, but maybe the advice should be going in the opposite direction.
Like the state, local units, including Chisago County, have had to find ways to adjust to declining economic resources over the past few years, but unlike the state, they have not relied on borrowed money to tide them over in tough economic times.
Living on credit is what got our country into the problem it has today, so it is disconcerting to see the state travel down that same path. In order to fill a $640 million hole in its budget, the legislature decided to borrow against future tobacco settlement proceeds.
In doing that, the state sold bonds, which is the government’s name for loans, that will cost the state a staggering total of $1.2 billion over the 20-year lifetime of the bonds.
That means if a child born today applies for his or her first job in about 2028, he or she will be paying taxes to cover part of the cost of balancing the 2012-13 state budget.
It is hard to believe that the “fiscal conservatives” who nixed the idea of any tax increases on the state level would agree to mortgage away the state’s future this way, but they did.
Last session, K-12 education was also targeted by the legislature, which “borrowed” money from them to help tide over the state.
Rather than repaying the $1.4 billion it had borrowed from schools in the previous year’s budget, the legislature increased that amount by another $715 million. That did not stop tax increases; it simply shifted the burden onto property owners who paid more in property taxes. It also put the education of our students at risk.
Cities were impacted as well when the state cut more than $600 million from property tax relief programs that affected them. These cuts, combined with borrowing from schools, created a triple whammy that will cause rising property taxes even if levies remain locked in at the same rate as previous years.
Aid cuts are nothing new to Chisago County, unfortunately. State aid has been chipped away gradually for a number of years, but the latest cuts impact our businesses in particular, and that is really galling.
It is even more frustrating to know that these cuts, particularly the elimination of the Market Value Homestead Credit program, came at a greater cost to greater Minnesota homeowners and businesses than to those located in higher wealth cities in the state.
The aid cuts make it harder for our property owners to keep in business or to compete with businesses in other states or in other parts of the state. It is hard to understand why greater Minnesota legislators would vote for that kind of a policy, but ours did, and now they are asking the cities and counties to fix a problem that was made – and can only be cured – at the state level.
Through it all, the County Commissioners have done their best to keep both taxes and services at a reasonable level, which is a real trick in these times of declining revenues.
They have done that without borrowing money to keep debtors off our doorstep and kept an adequate reserve fund to protect against emergencies – such as state aid cuts that arrive after their budgets had been finalized for the year.
It is ironic that our legislators, who cannot claim that same kind of fiscal responsibility, are now giving our cities and Counties advice. Maybe they should be taking advice from them instead.