The Minnesota Department of Finance has released their latest budget forcast for Minnesota’s government. Essentially, these folks make an educated estimate of how tax revenues are coming in, how government spending is proceeding, and comparing all of that to the budget that lawmakers set in 2005 and updated last May. This info will then be used to set up the budget that legislators will start preparing in January (or more likely not until February, when the Finance folks will release another updated estimate). The bottom line? There’s an extra $2 billion dollars that will be collected in the next two and a half years, but that is not currently allocated to be spent in any particular fashion.
So, let’s use this occasion to talk about why we need to increase the amount of tax dollars that go to protecting and restoring Minnesota’s Great Outdoors – a keystone of our economy and way of life.
Where we are starting
Here’s a quick bit of background and terminology (for those studying to earn their Certificate of Wonkishness). The legislature’s commitment to protecting our environment, as indicated by their prioritizing environmental and conservation spending in their budget choices, has waxed and waned over the last 30 years. On the whole, it has averaged around 1.7% of total state spending in a given year. Before the latest rounds of budget cuts, which began in 2000, it climbed as high as 2.25%. However, it then plummeted, with a slight rebound this past session, putting it to 1.17%.
You can click on this graph to see how environmental and conservation spending has been directed the last few years.
You’ll note that everything gets talked about in terms of Fiscal Years (FY), which actually run from July 1 to June 30th and are named for the calendar year they end in. For example, July 1 of this year was the start of FY 2007.
The $2 billion positive balance of revenue versus spending mentioned above is actually a combination of a few numbers. One, there is the expected surplus in revenues for our current budget cycle that ends next June and some budget categories are coming in under budget. On June 30, if projections hold, the state will have an extra $1.038 billion in the bank. Two, there is extra revenue expected to come in during the next two-year budget cycle to the tune of $1.132 billion. Since the budget that governs spending over the next two years hasn’t actually been created yet (it’s the main task of the upcoming session), this number is based off of a “base budget.” Truth be told, I don’t know how a spending item gets on to the magical list of things “built into the base,” but everything else is just considered “one-time” spending when it isn’t on the list. A good example of one-time money is $15 million allocated at the end of the last session for Clean Water Legacy that helped create the little up tick for this year in the graph above. Also missing from budget projection is the effect of inflation, which means that programs in the base are expected to get the exact same dollar amount in the future even though that dollar will have less spending power due to the annual rise in costs.
A much more thorough look at environmental and conservation funding can be found with this League of Conservation Voters budget report.
So, why spend more on the environment?
Because of our Great Outdoors, Minnesota is a great place to live, work and play. Despite the fact that our environment is so important in defining Minnesota and its protection is valued by Minnesotans of all political stripes, we have been failing to make the investment of our tax dollars necessary to ensuring a clean, healthy environment for generations to come. I won’t go into the long list of ailments that are affecting our lakes and rivers, damaging wildlife habitat, or hindering the progress we might otherwise be making in protecting our environment. Nor will I pretend that blindly throwing money at environmental programs will surely fix all of our woes. I will note though, that we must begin addressing our problems now. The alternative is having to try to solve them tomorrow, when they will be a lot larger and a lot more costly to fix. I believe we have an obligation to be good stewards of Minnesota – both as individuals and collectively through the state – and we need to do better.
I am sure that I won’t be the only person to say how a portion of the projected additional revenues should be spent. i am sure legislators will have to make some tough choices. But I am also sure that the environment must be one of their top priorities. Done right, the results will be cleaner lakes and rivers and protected special places for all to enjoy and utilize for generations to come.
The Clean Water Legacy funding approved this year, about $25 million, is not in the “base budget,” I’m pretty sure. And the desired funding was $40 million. So subtract $40 million from the surplus unless you propose cutting this brand-new initiative from the budget.
And why not make a bigger claim on the general fund? $100 million per year of the surplus — and perhaps bond against it, to get $1 billion immediately on the table to restore habitat, buy threatened lands, boost fish and wildlife populations, and clean up our lakes and rivers?
Dave,
You are correct that the Clean Water Legacy money was just one-time. $15 million was from the General Fund (and not included in any future budget projections) and $10 million was in the bonding bill. Because they didn’t do the full $40 million needed to gear up the programs, which would be fully funded at $100 million a year, there is indeed more lost ground to make up.
I know there are people who are trying to hammer out a good way of using money now to do upfront bonding, which has both the benefit you mention and gets the money into circulation now while land costs are lower. When I know more about that plan, I will post something.