MPR: A Boatload of Money

A Boatload of Money
By Laura McCallum
December 2, 1999

For the 15th consecutive time in seven years, state officials have projected a surplus for the state budget. The nearly $1.6 billion dollar surplus stunned legislative leaders, who are calling for tax cuts and more spending. But Governor Ventura and budget experts are urging a cautious approach.

FINANCE COMMISSIONER Pam Wheelock called it a boatload of money. Minnesota has an extra $500 million in the bank from the last two-year budget cycle that ended in June. And the state is expected to have another $1.1 billion surplus at the end of the current biennium in June of 2001.

Wheelock says the forecast is based on a more optimistic outlook from D-R-I, the national forecaster that HAD been projecting an economic slowdown in Minnesota in the next few years. She says D-R-I doesn't see anything on the horizon big enough to stunt this unprecedented period of economic growth, and she gave hedging approval to further tax cuts.

Wheelock: Certainly when you have the commissioner of finance and the state economist standing up here saying that we expect permanent growth of about half-a-billion dollars a year, that does suggest that there is room to talk about some policy changes, either on the expenditure or the revenue side, as long as you use prudent caution about your appetite.

But the Legislature's appetite is certain to be large since all 201 members are up for re-election next year. Lawmakers from both parties are talking about a wide range of tax cuts, and increased spending on everything from education to transportation. DFL Senate Majority Leader Roger Moe of Erskine, never one to show his hand until all the cards are on the table, says every tax should be up for discussion.

Moe: There will be some who will mention income taxes, property taxes, sales taxes, other kinds of fees and costs of government services will also be looked at. I just don't think that we can rule anything out at this time.

Moe and House Republican leaders agree the Legislature is almost certain to cut license-tab fees and pass another one-time tax rebate. House Speaker Steve Sviggum of Kenyon says Republicans will push for getting a tax rebate out quickly, something they caved in on last session, when the governor wouldn't budge on waiting til the end of the fiscal year to cut the rebate checks.

Sviggum: The cash is in hand. If I remember correctly, I think right now it's about $500 million in hand right now. Part of the argument maybe last year was it wasn't in hand until the June date or whatever, but the cash happens to be in hand now. Whether it be again the property tax, or sales-tax rebate, or income-tax rebate, we're going to get the money out the door and back in the hands of taxpayers.

Governor Ventura supports a sales-tax rebate of the $500 million already collected, which would amount to a little more than a third of this year's $1.3 billion rebate. Ventura says he'll renew his push for capping car tab fees at $75 per vehicle. But he's not backing any other tax cuts at this point; he says he's being cautious because he never believes projections until the money's in the bank.

Ventura: If I had paid attention to projections, I wouldn't be the governor. So you understand where I come from on that; projections are just that, they're projections.

Ventura says lawmakers should not consider new spending. But the governor has learned from his first session. He says although he's not supporting other tax cuts right now, nothing's set in stone.

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