Letter: State surplus was not a surplus
The Coalition of Minnesota Businesses sent me a flier in the mail, congratulating Rep. David Hancock for turning a "$6 billion deficit into a surplus without raising taxes." The flier was glossy and slick. In checking these claims, I found that Mr. Hancock and the St. Paul Republicans took out a loan and charged it to us. The "surplus" comes from delaying payments to our public schools (putting a financial strain on already struggling school districts) and selling bonds to get an advance on future tobacco settlement payments.
It sounds like a surplus, but where's the money? Is it in a bank? Did Mr. Hancock bury it in his backyard? Does the coalition have it? Show me the money!
Mr. Hancock and the Republicans in St. Paul can't because the "surplus" is an accounting trick as slick annd glossy as their fliers. The "surplus" they take credit for will have to be repaid to our schools, whose payments they borrowed. The $787 million they sold in bonds will have to be repaid, at a cost of over $1.2 billion. And from where does that money come?
The coalition says Mr. Hancock will pay the schools what they are owed by drawing from the state's budget reserves. That's the money he and St. Paul Republicans borrowed in the first place! There is no money, there is no surplus. There's just a jar full of IOUs that will cost all of us a lot more of our money down the road.
Why would a group of business people send out a flier like this? Perhaps because Mr. Hancock and the St. Paul Republicans protected tax breaks for businesses the Coalition represents and shifted the tax burden to property tax payers by eliminating the Homestead tax credit? A balanced budget surplus? Coalition people, Mr. Hancock, show me the money!