The States: Why does Minnesota wanna be Kansas?

[ScoobyDoo]

Continue.

[5mn_Major]

" Hovey: Why?

Honestly when I hear that any state has a $1.4 billion surplus of "revenue" over taxes, I want to scream. Government isn't a business where the goal is maximize revenue. Our target should be that revenue meets, or maybe just slightly exceeds, our expenditures.

The way the governor and legislature should operate is figure how much money is an appropriate amount to spend in the state each year, through compromise generally, then figure out how that money will be raised through the combination of taxes/fees, etc..., used to generate revenue for the state.

If we only did budgets and had the legislature meet every 10 years or so, then yes having some money in the bank or having a surplus to cover us for unexpected economic downturns over the next ten years would be nice and even appropriate. But we don't have that. If the economy goes in the tank, we don't need $1.4 billion sitting in the bank. The legislature can adjust it's taxes or spending accordingly.

The problem with the state having $1.4 billion sitting around is the same problem with me having $1.4 billion sitting around. Pretty good chance I'm going to spend large chunks of it on stuff I probably didn't need in the first place. And with a state, most expenditures are not one time expenses. Once you start spending money on a program, pretty good chance that program is with you for the long haul."

I'd give my own answer.

Yes, its true that the GOP is a terrible shepherd of fiscal responsibility. See Pawlenty on how that works out.

The GOP party has made news about its desire to open up more 3 vet nursing homes (I believe we have 5 now). Fine, but I thought services were supposed to win or lose in the marketplace by their own merits. At least that's the argument of why the GOP wants to starve teachers. How many GOP led states have teachers going on strike? Its not like education is the bedrock of a successful future or anything. The big issue with your position is that the GOP is doing all the spending and that the GOP is terrible spender of funds.

[unofan]

Jesus Christ, I thought the GOP was all about the Bible. How come they never remember Joseph and the 7 years of feast, 7 years of famine story?

[ScoobyDoo]

Jesus Christ, I thought the GOP was all about the Bible. How come they never remember Joseph and the 7 years of feast, 7 years of famine story?

Ask Ayn Rand or Ronald Reagan. That's who they truly worship.

[SJHovey]

Jesus Christ, I thought the GOP was all about the Bible. How come they never remember Joseph and the 7 years of feast, 7 years of famine story?

If it worked that way, I'd be all in favor. Unfortunately, it never does. When the money is there, it's too easy to say yes to new expenditures. These people are politicians. They're not saving their personal money.

All that means is that when the famine comes, it's only worse because you're spending more than you should have been.

[SJHovey]

" Hovey: Why?

Honestly when I hear that any state has a $1.4 billion surplus of "revenue" over taxes, I want to scream. Government isn't a business where the goal is maximize revenue. Our target should be that revenue meets, or maybe just slightly exceeds, our expenditures.

The way the governor and legislature should operate is figure how much money is an appropriate amount to spend in the state each year, through compromise generally, then figure out how that money will be raised through the combination of taxes/fees, etc..., used to generate revenue for the state.

If we only did budgets and had the legislature meet every 10 years or so, then yes having some money in the bank or having a surplus to cover us for unexpected economic downturns over the next ten years would be nice and even appropriate. But we don't have that. If the economy goes in the tank, we don't need $1.4 billion sitting in the bank. The legislature can adjust it's taxes or spending accordingly.

The problem with the state having $1.4 billion sitting around is the same problem with me having $1.4 billion sitting around. Pretty good chance I'm going to spend large chunks of it on stuff I probably didn't need in the first place. And with a state, most expenditures are not one time expenses. Once you start spending money on a program, pretty good chance that program is with you for the long haul."

I'd give my own answer.

Yes, its true that the GOP is a terrible shepherd of fiscal responsibility. See Pawlenty on how that works out.

The GOP party has made news about its desire to open up more 3 vet nursing homes (I believe we have 5 now). Fine, but I thought services were supposed to win or lose in the marketplace by their own merits. At least that's the argument of why the GOP wants to starve teachers. How many GOP led states have teachers going on strike? Its not like education is the bedrock of a successful future or anything. The big issue with your position is that the GOP is doing all the spending and that the GOP is terrible spender of funds.

I guess the way I look at it is this. As an individual, obviously it's a good idea to save for a rainy day. I do it and I'd hope everyone else does as well. But I think it's different with government.

Basically, operating a government and its programs is incurring a debt. If, for instance, the budget to run the State of Minnesota is say $50 billion, then we start with a $50 billion dollar public debt. Every dollar that the government doesn't take in the form of taxes and fees to cover that debt is a deficit. Every dollar the government does take in the form of taxes and fees effectively privatizes that portion of the public debt.

The effect of the surplus to to basically privatize more debt than is necessary. The government never gets rid of the deficit. It shifts it to you and me, and if they choose to collect a surplus, the amount they shift is even greater.

People get all freaked out by government deficits, but when you eliminate them or even go into the positive (surplus) you're just shifting more and more of that deficit onto individuals and businesses.

I think that hurts individuals and businesses more than it helps.

[unofan]

If it worked that way, I'd be all in favor. Unfortunately, it never does. When the money is there, it's too easy to say yes to new expenditures. These people are politicians. They're not saving their personal money.

All that means is that when the famine comes, it's only worse because you're spending more than you should have been.

You had a 1.4 billion rainy day fund. Sounds like they weren't just spending it.

[unofan]

I guess the way I look at it is this. As an individual, obviously it's a good idea to save for a rainy day. I do it and I'd hope everyone else does as well. But I think it's different with government.

Basically, operating a government and its programs is incurring a debt. If, for instance, the budget to run the State of Minnesota is say $50 billion, then we start with a $50 billion dollar public debt. Every dollar that the government doesn't take in the form of taxes and fees to cover that debt is a deficit. Every dollar the government does take in the form of taxes and fees effectively privatizes that portion of the public debt.

The effect of the surplus to to basically privatize more debt than is necessary. The government never gets rid of the deficit. It shifts it to you and me, and if they choose to collect a surplus, the amount they shift is even greater.

People get all freaked out by government deficits, but when you eliminate them or even go into the positive (surplus) you're just shifting more and more of that deficit onto individuals and businesses.

I think that hurts individuals and businesses more than it helps.

States can't run deficits. So they better have rainy day funds for recessionary times because their taxes will drop as sales and incomes drop.

[ScoobyDoo]

I guess the way I look at it is this. As an individual, obviously it's a good idea to save for a rainy day. I do it and I'd hope everyone else does as well. But I think it's different with government.

Basically, operating a government and its programs is incurring a debt. If, for instance, the budget to run the State of Minnesota is say $50 billion, then we start with a $50 billion dollar public debt. Every dollar that the government doesn't take in the form of taxes and fees to cover that debt is a deficit. Every dollar the government does take in the form of taxes and fees effectively privatizes that portion of the public debt.

The effect of the surplus to to basically privatize more debt than is necessary. The government never gets rid of the deficit. It shifts it to you and me, and if they choose to collect a surplus, the amount they shift is even greater.

People get all freaked out by government deficits, but when you eliminate them or even go into the positive (surplus) you're just shifting more and more of that deficit onto individuals and businesses.

I think that hurts individuals and businesses more than it helps.

States can't run deficits. And look what happened when the Feds were allowed to.

[ScoobyDoo]

If it worked that way, I'd be all in favor. Unfortunately, it never does. When the money is there, it's too easy to say yes to new expenditures. These people are politicians. They're not saving their personal money.

All that means is that when the famine comes, it's only worse because you're spending more than you should have been.

You want to be Kansas. Why? Have you looked at Kansas lately? You should.

[aparch]

States can't run deficits.

The State of Illinois would like you to hold it's beer while you watch it's next trick...

[FlagDUDE08]

Honestly when I hear that any state has a $1.4 billion surplus of "revenue" over taxes, I want to scream. Government isn't a business where the goal is maximize revenue. Our target should be that revenue meets, or maybe just slightly exceeds, our expenditures.

There's nothing wrong with a non-profit having a "rainy day fund", or whatever you want to call it, to be able to cover one-time deficits that might come up, like a highway bridge collapsing. However, unless you can find me a state on usdebtclock.org that actually has a surplus (because I sure as heck haven't seen one, Maine's ticker looks like it's about to get there, but MN's 8.5bil per year in the hole), perhaps the money best go towards paying off the debts.

[SJHovey]

States can't run deficits. And look what happened when the Feds were allowed to.

States can't run deficits. So they better have rainy day funds for recessionary times because their taxes will drop as sales and incomes drop.

I'm not talking about passing a budget that contemplates a deficit. I'm talking about deficits that occur when revenues don't at least match spending.

First, Minnesota has a rainy day fund. It sits at over $1.5 billion, last I saw. That is not what Scooby or Bakk are talking about. Bakk was tweeting about a budget surplus where anticipated revenue would exceed budgeted expenditures.

That surplus was reduced, and it was reduced by a combination of increased spending by the legislature, and passing tax cuts. And that's why a big budget surplus is bad. It causes legislators to not act rationally. They either spend money on things we might not other wise spend them on, because we have the money, or we pass some tax cuts that are probably greater than what we should pass. That's how Minnesota reduced it's surplus.

Now, if by some miracle the legislature hit it just about right in terms of the size of the tax cut and what the increased spending will really cost us, and going forward we continue to see revenues that are right about at or slightly greater than the budgeted expenditures, great. Unfortunately, I don't think that will happen.

But to say that we'd be better off just pulling an extra $1.4 billion out of the Minnesota economy each year is crazy and unsustainable.

[ScoobyDoo]

I'm not talking about passing a budget that contemplates a deficit. I'm talking about deficits that occur when revenues don't at least match spending.

First, Minnesota has a rainy day fund. It sits at over $1.5 billion, last I saw. That is not what Scooby or Bakk are talking about. Bakk was tweeting about a budget surplus where anticipated revenue would exceed budgeted expenditures.

That surplus was reduced, and it was reduced by a combination of increased spending by the legislature, and passing tax cuts. And that's why a big budget surplus is bad. It causes legislators to not act rationally. They either spend money on things we might not other wise spend them on, because we have the money, or we pass some tax cuts that are probably greater than what we should pass. That's how Minnesota reduced it's surplus.

Now, if by some miracle the legislature hit it just about right in terms of the size of the tax cut and what the increased spending will really cost us, and going forward we continue to see revenues that are right about at or slightly greater than the budgeted expenditures, great. Unfortunately, I don't think that will happen.

But to say that we'd be better off just pulling an extra $1.4 billion out of the Minnesota economy each year is crazy and unsustainable.

LOL

Let's just go back to Pawlentiomics then, right? Good plan. 2.8 billion extra at the state level is nothing when the next recession hits. Anyone who thinks otherwise is not thinking clearly.

[5mn_Major]

There's nothing wrong with a non-profit having a "rainy day fund", or whatever you want to call it, to be able to cover one-time deficits that might come up, like a highway bridge collapsing. However, unless you can find me a state on usdebtclock.org that actually has a surplus (because I sure as heck haven't seen one, Maine's ticker looks like it's about to get there, but MN's 8.5bil per year in the hole), perhaps the money best go towards paying off the debts.

Not my quote.

I'm not talking about passing a budget that contemplates a deficit. I'm talking about deficits that occur when revenues don't at least match spending.

First, Minnesota has a rainy day fund. It sits at over $1.5 billion, last I saw. That is not what Scooby or Bakk are talking about. Bakk was tweeting about a budget surplus where anticipated revenue would exceed budgeted expenditures.

That surplus was reduced, and it was reduced by a combination of increased spending by the legislature, and passing tax cuts. And that's why a big budget surplus is bad. It causes legislators to not act rationally. They either spend money on things we might not other wise spend them on, because we have the money, or we pass some tax cuts that are probably greater than what we should pass. That's how Minnesota reduced it's surplus.

Now, if by some miracle the legislature hit it just about right in terms of the size of the tax cut and what the increased spending will really cost us, and going forward we continue to see revenues that are right about at or slightly greater than the budgeted expenditures, great. Unfortunately, I don't think that will happen.

But to say that we'd be better off just pulling an extra $1.4 billion out of the Minnesota economy each year is crazy and unsustainable.

We live in a two party system. Simple question...

Would you rather have a $1 billion surplus (D) with great education and a healthy business climate that Dayton has...or major deficits, ed spending falling through the floor and begging companies by showering them with money that are trademarks of GOP administrations in WI, KS, CO, WV, AZ, etc?

[joecct]

Jesus Christ, I thought the GOP was all about the Bible. How come they never remember Joseph and the 7 years of feast, 7 years of famine story?

I think the Chinese believe in 7 years fat, 3 years lean.

[dxmnkd316]

Continue.

Must spread rep.

[dxmnkd316]

From the MN Dept of Revenue:

How much does the state have in reserves or "rainy day" funds?

Minnesota currently has $811 million in its general fund budget reserve. Just like a family's need to have emergency funds available for unexpected household costs, the state's general fund budget reserve ("rainy day fund") is an important risk management tool to reduce disruptions in state services caused by declines in revenue or expenditure increases related to national economic cycles. The state general fund also has a separate $350 million cash flow account - primarily to maintain sufficient cash balances during the year to manage timing significant timing differences in when revenues are collected and payments made.

The National Governor's Association and National Association of State Budget Officers recommend minimal reserve levels equal to five percent of annual spending. Standard & Poor's rating framework affords top scores to states with "a formal budget reserve relative to (one-year) revenue or spending that is above 8 percent." Prior to the 2014 legislative session, Minnesota's statutory maximum level for the budget reserve was set at $653 million was set in 2000, and was the equivalent of about 3.7 percent of current annual spending.

In 2014, the Legislature increased the budget reserve by $150 million, increasing it to $811 million. The legislation also set a target level of approximately 10 percent of annual revenues, permitted the target level to adjust to changes in revenues and created an automatic process to dedicate one-third of future November forecast balances to the budget reserve to meet reserve target levels.

[dxmnkd316]

States can't run deficits. So they better have rainy day funds for recessionary times because their taxes will drop as sales and incomes drop.

Especially true since a huge chunk of the state's revenue comes from sales tax. Obviously there are income impacts to a recession, but I'm not sure how severe they are compared to spending.

[Slap Shot]

MN continues to be a model of how to get it right on a myriad of levels: Education, environment, business development, opportunity, arts, science, parks and rec, crime and hell even gun rights. I cannot wait to get back and if these ND efftards try to mess with it ill come looking for them.