The Minnesota State Legislature has wrapped up its 2008 legislative session. I’ve seen some media reports that throw in the “finally” between the words ‘has’ and ‘wrapped’. There are lots of things the legislature could be criticized for, but you’ve got to give them some credit for completely their session on time. They needed to be adjourned by May 18, and they met that deadline.
Over 8,000 bills were introduced in this past session. That’s a record. The legislature’s custom has been to reserve the legislative sessions in even-numbered years for bonding bills and to do a minimal amount of operating budget and other legislative activity. That custom is quickly falling by the wayside, which is regrettable, in my opinion.
The big compromise at the end of the session included the imposition of new property tax caps on city and county governments, but not school districts. This was a big deal to the Governor. The House and Senate ultimately relented to the Governor’s wishes in order to reach an amicable end to the session, and to secure his support for additional capital funding for the new Central Corridor light rail line connecting St. Paul to Minneapolis.
I think levy limits are bad public policy. Our City Council has expressed their opposition to levy limits as well. Levy limits are an intrusion into the authority of locally elected officials. Why should the State Legislature’s view of local property taxes be allowed to trump the property tax decisions of a City Council or the citizens that elected them?
The levy limits approved by the State would allow our city’s levy to increase by around 5.5% in 2009. Our 2009 budget (adopted by our City Council back in December of 2007) includes a proposed levy increase of less than 4%, so the levy limit legislation does not have any practical impact on Eden Prairie in 2009. However, it’s too early to say that for 2010 and 2011. The regulatory logistics of the new levy limit system has not been completely figured out yet. There’s more to come on this later.
Perhaps the biggest concern that did not get enough discussion at the legislature this session is a looming state budget deficit for the next two year budget cycle. The legislature and the Governor filled a revenue hole in the current state budget by drawing down their budget reserve account (among many budget moves) from around $650,000,000 to $135,000,000. There’s nothing wrong with that. That’s what reserves are for.
But it now appears that the State’s 2010-2011 budget is going to be in the red by $2.5 billion, a far cry from the $900+ million budget deficit they fixed this year by spending the budget reserves. The Governor successfully tackled a $4+ billion deficit a few years ago, so it’s not be impossible to envision a solution, but I can (almost) guarantee that it will be a solution that includes new revenues (taxes & fees) and spending cuts – a politically dicey combination.
