Grading the state budget: Not bad, but there’s much more to do | Column

June 28, 2021 8:06 am

Gov. Tim Walz. Pool photo by Glen Stubbe/Star Tribune.

The Legislature and Gov. Tim Walz slogged their way to a state budget just days before a government shutdown. Given the inflow of federal cash paired with a divided government, it’s the kind of status quo with a shot of espresso agreement we would expect. 

Which is fine, insofar as by many measures, Minnesota has an enviable quality of life that we’ve earned in part through progressive governance, with solid measures of income, health, education and environmental quality. 

But that’s not the end of the story. Despite our good numbers in the aggregate, our prosperity, health, education and environmental quality are not equally shared. 

We suffer — and/or stroke our chins with much concern while doing nothing about — some of the worst racial disparities in the nation. 

White homeownership: 77%; Black homeownership: 25%. 

White high school graduation rate: 88%; Black graduation rate: 67%. 

Black infant mortality rate: Double the white infant mortality rate. 

Beyond race, Minnesotans’ lives are too much dictated by what ZIP code they’re born into, which has only been exacerbated by the pandemic.  

COVID-19 has sorted people. There’s the “Peloton surplus demo,” as someone put it to me to describe those who worked from home and had extra disposable income to buy frivolous items. And then there’s people who lost jobs and income or had to take unpaid leave to care for sick loved ones.  

Every state budget should be primarily concerned with closing those gaps, lifting up the people left behind.

So, how did we do?

Let’s start with the good.

Schools will get an extra $1.2 billion over base funding during the next four years, including significant increases on the per-pupil funding formula in the next two. We retained 4,000 voluntary pre-kindergarten slots and passed the Teacher of Color Act, in an effort to improve on a teacher corps that is 5% Black, Indigenous and other people of color even though our student body is more than one-third.

Despite a disgraceful Republican effort to block aid to businesses damaged by the rioting following the murder of George Floyd, the budget includes $150 million help those businesses, as well as others hurt by the pandemic. 

The tax bill includes $20 million to prevent homelessness, which is a growing problem given our housing crisis, and is especially damaging to students. 

Another measure includes $8 million in grants to child care providers, which struggle to make money even while their workers — many of them women of color — make low wages. 

More money will go to personal care attendants — the people who play a key role in caring for the elderly and people with disabilities — which is one of the most in-demand jobs while also paying some of the lowest wages in health care. Their minimum wage will increase from $13.25 to $14.40 in October 2021 and to $15.25 in July 2022, a 15% increase, and they’ll get more paid time off and more holidays that will deliver time-and-a-half pay.  

Welfare recipients will receive a $435 one-time payment, as well as a cost-of-living increase going forward.

There’s some funding for important mental health initiatives, including mobile mental health crisis teams. 

We fought off a particularly cruel effort to eliminate the Market Bucks program, which helps low income people shop at farmers’ markets. 

We’ll start planning a land bridge over I-94 to reconnect the Rondo neighborhood and likely bring a wave of private investment. 

We’re getting some bus rapid transit lines. 

The state will spend $70 million on rural broadband. 

Finally, people who received unemployment benefits last year won’t have to pay state taxes on it. 

Thanks to President Joe Biden’s American Recovery Act legislation, the DFL-controlled House and Walz were able to negotiate a lot of these items, while Republicans got their top priority, which was to prevent businesses that received federal Paycheck Protection Program money from having to pay state taxes on it. 

From my standpoint, a fair trade. 

Indeed, a Republican legislator I talked to was rueful about the end result: “When the right wing crazies say there is no difference between Democrats and Republicans, this budget deal kinda makes them look right.”

Given all the federal money and the state’s vastly improved fiscal outlook, I’m a little surprised we are not engaging in some capital-intensive projects that would make a noticeable difference in people’s lives almost overnight, like air conditioning the schools so they could be used for year round schooling and as community assets.

Or fixing our aging water infrastructure, which, as state Sen. Erin Murphy noted, would ease property tax burdens while improving our water quality. 

Or delivering high speed internet to every community, including the 30% of rural Minnesota that doesn’t have it.

Even more important than these ideas, however, are programs for which we can’t use one-time money.

A housing voucher to everyone who qualified would cost $1.1 billion while delivering significant relief to nearly 225,000 renter households across the state. 

What if instead of making incremental gains hiring Black and Indigenous teachers, we hired 10,000 of them. I’m ballparking here: At $75,000 per year with benefits, that’s $750 million. 

(For some perspective, our total state budget is around $52 billion.)

Or how about universal childcare and preschool? A few billion more.

(On this issue, Ericca Maas, executive director of the early childhood group Close Gaps by 5, said, “As a result of legislators’ inaction, tens of thousands of low-income children ages zero to five are still unable to access the quality early learning programs they need to break out of the opportunity gaps at the root of Minnesota’s worst-in-the-nation achievement gaps.”)

These gains I’m proposing would vastly improve the lives of Minnesotans most in need, but you’d need another tax bracket and a higher corporate tax rate to pay for them. Even the kinds of investments Biden has proposed won’t make it happen. 

From a purely economic standpoint, we can afford these things. 

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J. Patrick Coolican
J. Patrick Coolican

J. Patrick Coolican is Editor-in-Chief of Minnesota Reformer. Previously, he was a Capitol reporter for the Minneapolis Star Tribune for five years, after a Knight-Wallace Fellowship at the University of Michigan and time at the Las Vegas Sun, Seattle Times and a few other stops along the way. He lives in St. Paul with his wife and two young children