Exit Interview: Myron Frans hands reins of budget agency to Jim Schowalter amid economic downturn, deficit

In the waning hours of his six-year run as commissioner of Minnesota Management and Budget, Myron Frans spoke with the Minnesota Reformer about the political polarization that has come to characterize state politics, what makes a good budget chief and how Gov. Tim Walz compares with Mark Dayton, the DFL governor who first hired Frans as commissioner of the Department of Revenue and later appointed him to manage the state’s budget agency. Frans was recently appointed to become senior vice president of finance and operations at the University of Minnesota. 

His responses here are edited and condensed for clarity.

Q: You’ve now worked for two governors, and I remember you coming in to the job preaching the gospel of having a robust rainy-day fund. In light of the economic downturn caused by COVID-19, do you in any way feel vindicated that you pressed so hard for that?

Myron Frans: I really like that question because you need to know where you’re going if you want to get to where you want to be. The very first conversation I had with Gov.-elect Mark Dayton in late December of 2010, we sat around this table in my interview with him for commissioner of revenue, and we started talking about tax reform and the fact that we’ve had a decade of deficits coming into that time period, and it was clear that we simply did not have enough revenue. Minnesotans wanted service delivery at a certain level, and we had not been willing to do the politically hard thing to match the revenue with the budgets, and that’s where we had all the deficits. We knew we needed to tackle tax reform and increase revenue. We knew at that point that we would join forces to work toward getting Minnesota back to a position where it used to be, and that’s the triple A status where it had balanced budgets, had ample revenue, and was investing in education and health care and clean water, and in the people of Minnesota. We knew that part of that was a rainy-day fund because we knew what it was like to face a $6 billion deficit. There’s a technical term we use for that at MMB, and it is called, “That sucks.” Think about it: we have a $2.3 billion deficit now. We knew we didn’t ever want to leave another administration in the way that we took over in 2011, and so we knew where we wanted to go. 

Q: What is your take on the political polarization that has gripped the state and the country, especially from your perch as a budget chief?

M.F.  Remember, 2011 is when Republicans had taken over the House and the Senate for the first time in, like, forever. You had the Republican House and Senate against Mark Dayton, the DFL governor, and things were really hot and heavy in those days. It’s progressively gotten worse even since then. It’s troubling because what used to get done more is that people of both parties would get together and see a problem, and then they would figure out, how are we going to solve this problem? It’s hard to talk disparagingly about your colleague when you’re at the table negotiating. You’d come up with a compromise, because how can you compromise with someone you just disparaged in public the day before? It’s not a very good plan. I think that this polarization makes it more and more difficult for people of different political views just to solve basic problems. And that’s all government is, frankly — primarily solving problems that need to be addressed, making opportunities available for people or removing barriers and providing equal opportunity for everybody. That’s a lot of what we do. But this polarization makes it harder to have an accepted truth, as well. The facts are the facts, but anymore, it’s not necessarily true. It used to be that you can argue about your position, but you can’t argue the facts. Well, people do argue the facts now, and that’s made it even more difficult to have a good, clear vision of what is our financial situation. 

Q: If you had to compare the two governors you’ve worked for, what would you say?

M.F.: You’d be hard pressed to come up with such different backgrounds from two different DFL governors, very progressive governors, but very, very different backgrounds. But they’re similar in the sense that they’re both very smart, and they understand how government works. Gov. Dayton would tend to get enmeshed in more detail sometimes, but Gov. Walz really puts us to the task and he makes sure that we come up with not only a good explanation of the problem, but several different scenarios and options to consider. They’re both hardworking, both really smart and both really fun. They’re really very funny in very, very different ways. They’re just different, so it’s been great to work with both of them. 

DFL Gov. Tim Walz in February reacted to a forecast showing a projected $1.5 billion budget surplus while Myron Frans, Minnesota Management and Budget commissioner looks on. Photo by Ricardo Lopez/Minnesota Reformer

Q: What have been the biggest changes at the budget agency to improve the diversity of the state’s workforce?

M.F.: The biggest change is because of focus. At the beginning of 2011, the percent of people in different groups and diverse groups in the state government workforce was about 8%, and now it’s a little over 14.4%. We’ve focused on it a lot the last six years ever since I came to MMB. We’ve really focused on diversifying the workforce, not just in hiring, but making sure that we have good tools to retain people and to make them feel included. It’s been a lot of work and I think we’ve made a lot of success. Still, we’d like to get to 20% because that’s close to what the population of [people of color] in Minnesota represents. The great thing about what we’ve done is we’ve increased diversity at all levels. What we’re showing people and trying to make it clear is there’s a great business case for diversity: the more viewpoints, the more talented people you have from different backgrounds, the better your analysis is going to be of different problems. 

Q: One of the things that did not make it across the finish line this year at the Capitol is recalculating how the state forecasts its spending, which isn’t tied to inflation. Is that a regret of yours? Do you anticipate that that effort will continue under the new budget commissioner?

M.F: I think so. I mean, inflation is real. So even though inflation has been tempered the last number of years, nonetheless, if you don’t account for inflation, your service level is going to erode over time. Part of our mission is to try to get the Legislature to agree to include this because we want to make sure that when we have a budget for one year, that we have enough money to make sure that second year, the same level of service is there. If you don’t include inflation, it’s gonna eat away at them. That is an area where we really are understating the cost of providing services. In the interest of really transparent and open budgeting, it’s an area that we really should include.

Q: Second-to-final question: What makes a good budget chief?

M.F: How the hell would I know? *Laughter* Well, you know, somebody was asking me the other day, why did you stay? I’ve been doing this for 10 years between Revenue and MMB, and you have to be somewhat of an optimist because if you get to be too pessimistic, there’s so many things that could just drive you crazy that I don’t think you could survive. But you have to be a realistic kind of an optimist because you can’t have too rosy of a projection, otherwise it’s not going to work. But I think a really good budget chief is someone who understands where you want to go. You’ve got to be someone who talks to the governor and lieutenant governor and say, “Okay, where do you want to be in two to four to six years? What are the investments you want to make, in education, health care and whatever, and how much do you want to invest?” A really good budget chief is a strategy person for the governor and lieutenant governor to say, here’s how you get to those investments. If you ran on these investments, and you want to deliver those investments, then here’s how you plan to get there. 

Q: Final question: Incoming Commissioner Jim Schowalter has been in the job before, but a lot has changed since he was last commissioner. What advice would you have for him now?

M.F.: We’ve had a lot of discussions and Jim’s a really smart guy. He was a 20-year veteran of MMB before he became commissioner. He was a budget director for a while and then became commissioner, and he’s been out in the health care industry. It’s pretty rare to get the opportunity to come back to something like this. And so I think he will come back with a renewed sense of opportunity of public service. I know he really takes that very seriously. But things have changed. The nature of our world has gotten more complicated, especially with COVID. So I mean, there’s more interaction with the MMB commissioner, the governor’s office and the governor because the COVID-related stuff is so budget oriented, too. So he’s just going to find the plate is a little bigger than it was before. It’s still a very heavy plate, but it’s just now a little bigger. I can’t think of anyone better to take over the job right now than Jim Schowalter.