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ABOUT USThe Minnesota Budget Project is an initiative of the Minnesota Council of Nonprofits.
The Campaign for a Better Budget ProcessProcess does matterMinnesota's elected officials are charged with the essential duty of managing the state's finances, making critical decisions about how to balance revenues and expenditures to ensure a successful future for the state. Although attention is usually focused on the ultimate outcomes of a legislative session, we should not forget the decision-making process that lies beneath. A good process ensures a well-informed debate which includes ample public participation. The Minnesota Budget Project is advocating for a Better Budget Process in Minnesota. Based on five principles to guide us to a better process, the Minnesota Budget Project recommends that the state's economic forecasts take inflation into account and that the state incrementally build the size of the state's budget reserves to a responsible level.
Legislative UpdatesBudget Reforms in the 2007 Legislative Session: Progress Lost to a Veto The 2007 Legislative Session saw progress on several key principles of a Better Budget Process, including taking inflation into account in the state's economic forecasts and adding to the state's budget reserves. Unfortunately, the Governor vetoed the omnibus tax bill that contained these important provisions. However, the increased level of support and public interest in these issues indicate that the debate will continue. The Minnesota Budget Project has issued an analysis of budget reforms proposed in the 2007 Legislative Session Ensuring the State's Economic Forecasts Take Inflation into Account On January 26, the Minnesota Senate passed Senate File 25, which would overturn the 2002 law that forbids the inclusion of the impact of inflation on spending in the state's fiscal forecast. SF 25 is consistent with the Minnesota Budget Project's recommendations for a better budget process. The bill is still awaiting action in the House. On February 28, several prominent public finance experts released a statement supporting the goal of restoring the impact of inflation on spending in the state's financial forecasts. A provision to restore a measure of inflation in the forecast was included in HF 2268, the omnibus tax bill passed by the Legislature. On May 31, 2007, the Governor vetoed this legislation. The Minnesota Budget Project expressed our disappointment with this blow to fiscal responsibility. Building the State's Budget Reserves When Governor Pawlenty released his proposed budget, he took a good first step in increasing the budget reserve. The initial budget proposal added $47 million to the reserve in FY 2008, and would build the reserves over time by allocating a portion of future surpluses to the reserve until it reaches 5% of annual spending. In his Supplemental Budget, Governor Pawlenty proposes increasing the budget reserve by $147 million in FY 2008, and continues to set 5% of annual spending as the goal. The Minnesota Budget Project applauds the Governor's efforts to increase the budget reserves, but we continue to urge a higher long-term goal. The state's Council of Economic Advisors suggests that 5% of biennial spending might be a more prudent target. On March 28, the Senate passed SF 2054, which sends an additional $629 million to the budget reserve. The House increases the budget reserve by $30 million in their omnibus tax bill (HF 2362). The Legislature included a $150 million increase in the budget reserve in the omnibus tax bill (HF 2268), which was vetoed by the Governor. As a result, the budget reserve will remain at existing levels. Budget Process Issues in the MediaBelow are links to media coverage of budget process issues.
Updated April 16, 2008 |
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