New Leadership, Big Challenges, Bigger Opportunities.
The title for the Minnesota Chamber of Commerce Regional Policy Meeting recently in Baxter (reflected in this blog title) really says it all. Bill Blazar, Senior Vice President of Business Development & Public Affairs with the Minnesota Chamber of Commerce, led a lively discussion with about 30 of our business leaders in the Brainerd Lakes Area.
On the majority of issues discussed, there was widespread consensus in the room. But how we achieve these overall goals is not without concern, especially for large regional communities such as Brainerd. Government must start operating like a business – within its means. Preliminary results of our Brainerd Lakes Chamber member survey indicate 70 percent of members are opposed to tax increases. To achieve a balanced state budget, we then must cut spending.
General fund revenues in Minnesota are projected to increase by nearly 8 percent by 2012-2013. Would you be satisfied if your company revenues grew by that amount? This projected increase should be substantial enough to support Minnesota’s needs. The problem is general fund spending during this same time period is projected to grow by more than 20 percent, which has led the state into a projected budget shortfall. How can we balance the budget? The Minnesota Chamber – and the Brainerd Lakes Chamber – support reforming the budget process as well as reducing overhead costs and increasing efficiency. The Minnesota Chamber wants the Legislature to live within the projected general fund revenue of $33 billion. There isn’t a need – or an appetite in the business community – for the state to spend more than $38 billion. Rather than building a budget based on past practices, the Legislature has the opportunity to take a step back – wipe the slate clean. Our legislators need to create a budget based on our most important needs – our priorities.
The budget proposals of the Minnesota Chamber, in large part supported by Minnesota businesses, are not without some controversy. One change the Minnesota Chamber advocates is the need to realign public sector jobs with those in the private sector. This can be accomplished, in part, through reform of public employee compensation packages. Through redesigning public pension and health insurance programs, the Minnesota Chamber estimates the state can save at least $637 million.
The Minnesota Chamber also supports replacing local government aid with a much smaller local government innovative fund. This proposal would hurt greatly large regional centers, such as Brainerd, that have large percentages of tax-exempt property. This proposal must be carefully explored so that economic growth is not impeded in communities losing LGA. There needs to be a level playing field for communities competing for business development. If this change moves forward in the Legislature, it should be phased in over time and state mandates must be addressed to give local control of spending to local governments. A phased-in approach would give LGA recipients the opportunity to reshape and restructure government while continuing to deliver high quality services. Through redesigning government, opportunities for communities to collaborate can be encouraged with incentives. Circuit-breaker programs for property tax relief also should be explored.
The state chamber estimates cost savings of $800 million through elimination of local government aid.
Another suggestion by the Minnesota Chamber, one that carries an estimated $1 billion in cost savings, is to redesign medical assistance.
Other priorities for the Minnesota Chamber this legislative session include reforming K-12 education for world-class results; streamlining environmental permitting processes; and repealing the ban on nuclear power.
What can you do? Share your opinions with your locally elected legislators. Share your business story – how do you set business priorities and balance your budget? How do you want your state government run? Ask your legislators to bring these private-sector ideas to state government to balance our budget.