Taxpayer-funded lobbying by local MN governments doubles in pandemic
The pandemic may be over but the quest to continue the seemingly unlimited amounts of federal cash doled out to state and local governments the last two years has only…
Last week, Minnesota Management & Budget announced a forecast surplus of $7.746 billion for Fiscal Year 2022-23. The DFL was quick to take the credit:
But the argument that wise state government policy is responsible for Minnesota’s budget surplus looks a little dubious when we note that pretty much every state has a budget surplus forecast. Wisconsin has a surplus of nearly $5.9 billion forecast for FY 2023; Iowa ran up a surplus of $1.2 billion for 2021; South Dakota had a nearly $86 million budget surplus at the end of fiscal year 2021; North Dakota is forecasting a surplus of $1 billion. The common factor here is not the wise economic guidance of the Minnesota DFL, but the open-handed generosity of the federal government.
In an article for Minn Post, Peter Callaghan writes:
“I think the federal government essentially made it impossible, fiscally impossible, not to survive,” said Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence, a business-leaning nonprofit that analyzes state spending and taxation, referring to the three different interventions by Congress that sent billions of dollars into the state economy via extended unemployment, business grants, stimulus checks, money for hospitals and transit and child care.
Haveman said the statistic that “absolutely blows my mind” is that states’ personal income growth in 2020 — the heart of the pandemic — was the highest in 20 years, “thanks to government transfers.”
“That’s what was lurking behind the scenes here,” he said. “That stat puts in crystal clear perspective how critical the federal government was in this whole process and why everybody is largely doing OK.”
“Strong tax-revenue growth over the past year has been almost universal across states, and Minnesota was no exception,” said Justin Theal, an officer with the state fiscal health team at Pew Charitable Trusts.
It isn’t the state government, but the Trump and Biden administrations which are to thank for throwing money into Minnesota’s economy and generating this surplus. Now they just have to figure out how to pay for it.