Presentation Transcript
Straight Talk about Government Finance: Straight Talk about Government Finance John Gunyou gunyou.com
Slide2: “I never did give anybody hell.
I just told the truth, and
they thought it was hell.”
(President Harry S Truman )
What caused the budget crisis? multiple choice: 9-11 and the recession
Spending is out of control
Carlson & Gunyou
Political myopia
It was Jesse’s fault What caused the budget crisis? multiple choice
Spending is not out of control our national rankings are falling: Spending is not out of control our national rankings are falling Spending (% income) 1992 2002
All Gov’t Services 10 22
K-12 Education 9 27
Higher Education 28 35
Highways 13 23
Public Welfare 4 10 Source: Minnesota Taxpayers Assn, “How does Minnesota Compare?”
The crisis was self-inflicted with short-term thinking: The crisis was self-inflicted with short-term thinking Source: Minnesota Department of Finance, various documents. Four years of deficits
True or false?: How big is the surplus?
A billion dollars
$405,071,257.32
There is no surplus True or false? The budget was balanced
without raising taxes
Slide7: There is no surplus no new programs, restoration or tax cuts 2006-07 2008-09
Ongoing Revenue $31.4 $33.3
Ongoing Spending 31.4 32.2
Difference 0 $1.1
Program inflation 0.9
Transportation bonds 0.2
Real Difference 0
One-time balance $0.4 Source: MnDOF, Feb 2006 Budget Forecast.
How they patched up the deficit : How they patched up the deficit Source: Minnesota Department of Finance, various documents.
What reforms were implemented? to prevent future crises : What reforms were implemented? to prevent future crises Controlled major cost drivers
Programs to reduce future costs
Stabilized volatile tax system
Tied funding to results
Strengthened local partnerships
Who provides your services? : Who provides your services? Grants to local governments & nonprofits Source: MnDOF, 8-05 EOS report. Cities, counties & schools
Uncle Sam & Cousin Tim
Taxpayers League
Why property taxes are soaring: Why property taxes are soaring Source: Gunyou property tax bill, March 2006. LMV phase out
School formulae
Unfunded mandates
State reneged on its promise to take over school funding: State reneged on its promise to take over school funding Source: MnDOF, 9-05 POG report.
We’re investing in our future by supporting:: hogs, frogs & blogs
educated workforce
transportation infrastructure
early childhood education
sports stadia We’re investing in our future by supporting: Which investment has the highest ROI?
Lagging college support prices education out of reach: Lagging college support prices education out of reach Source: Illinois State University Grapevine; annual appropriation change
Governor’s transportation plan mortgages the future: Governor’s transportation plan mortgages the future 10 yr program paid with 30 yr bonds
Debt paid from:
maintenance dollars
$600 million GF
Gas tax hasn’t gone up in 18 years Source: MnDOT, Pawlenty-Molnau Bonding Proposal.
Final exam: essay question Discuss how MN is positioned for the future: Final exam: essay question Discuss how MN is positioned for the future Source: Bureau of Economic Analysis, U.S. Dept of Commerce. Arne Jesse Rudy Tim?
Slide17: “Never doubt that a small group
of thoughtful, committed citizens
can change the world. Indeed,
it is the only thing that ever has.”
(Margaret Mead) You can make a difference