Tuesday, May 16, 2017

Dayton Digs in on Budget

Now this is even getting more exciting....  Thoughts?
MP Dayton Digs In - Briana
MPR Dayton and GOP to Resume Talks
Dayton Veto Detail Page


To add a little substance here, Jerry claims the GOP budget is balanced and that he wishes the GOP had been even more aggressive..
"Personally, I would have preferred a REAL budget battle, in which spending got pretty much held the same and then increased very modestly once the Governor found he couldn't bully Republicans into getting everything he dreamed of. I don't count a, what, 12% increase, as a win for fiscal sanity." Jerry

"As I said... It won't be the high level issues that will cause heart burn... It will be those devils in the details. Those annoying controversial things that the dominant party thinks they have a mandate to put in a bill where they don't belong. " G2A

"That's a very interesting take. Mine is that most people don't make it past the high-level "spin" put out by both parties. Everything depends on the "message" getting out, and whoever has to talk nitty-gritty details usually loses the debate. Let's see how this plays out.

The question would be: suppose the Republicans "compromise" with the Governor. What do you suppose he would take, and how would he get it? The GOP budget is balanced. " Jerry

A balanced budget seems dependent on the forward looking expectations from the sides reviewing it... Or has the State Management group deemed it so? G2A
Personally I find it hard to believe that anyone knows if the budget is balanced in reality.  I mean how would they know how the changes they are implementing will impact revenues / expenditures without a serious review by an impartial party?


Go MN GOP Claims Balanced
Daudt's Letter

21 comments:

jerrye92002 said...

The budget is balanced within anybody's ability to do so, as required by the State Constitution. Dayton doesn't care about that, he just wants more, more and more spending to be controlled by Big Daddy Government. He doesn't even care where or how it is spent, it seems. And the increase is apparently 8%, which is FAR too high. I know /I/ did not get an 8% raise last year.

John said...

Technically I think 8% is ~4% per year and that is pretty slow since a lot of that spend goes to people stuff which goes up faster than inflation.

And if the State population is growing that also requires growth...

In other words 8% is keeping the budgets pretty much fixed.

John said...

Here are a couple of great links
MMB Inflation and Population Growth

And I wish they would update this one...
MMB MN Spending History

MMB Reference Site

John said...

MN Tax Incidence Study

jerrye92002 said...

Sorry, but I have run the numbers on that. If State spending had kept up with inflation and population growth, the current state budget would be about $3 billion, and instead it is 46 billion. Are we really getting that much extra "benefit" from what the state spends?

As for growth in spending, the last time I ran the numbers, it comes out to about 18% per biennium or 9% per year, for the last ~60 years. Too bad there is no way to invest in that kind of return. You could retire a millionaire. Before taxes, of course.

John said...

Thank heavens for google keeping all my historical content and helping me find it....

Jerry,
I have proven your strange calculations wrong before... Here we go again...
G2A MN Then and Now

jerrye92002 said...

You haven't proven anything. Either your math or your basic numbers are wrong. My figures, from the Minnesota Office, show 1960 expenditures of about $250 M. Start there you get a lot closer to the numbers I gave you. Also, from /your/ chart, the "average" of 18% per biennium looks pretty close, too. Your calculation does not come even close.

The quibble still stands. The current increase is about 16% over the biennium, right? Isn't that ridiculous, and the Gov wants even more?

John said...

Jerry,
The All Funds Total Spend in 1960 was $509,153. I linked to the MMB source.

2016 2017 Budget

Mn Budget Bites

MPR Talks Break down. Again...

John said...

Per page 8 of this report the increase would be from

$41.8B to $45B which would be 8%. And if that is for 2 years then it would be 4%... I wish they did this annually... It would be much simpler.

jerrye92002 said...

Thank you for making me more satisfied with the GOP majority. 8% over two years is substantially below the long-term average of about 18% per biennium. It is still too high, and so long as Republicans stick to this high level argument they have a good chance to prevail in public opinion.

You are also correct that I was using the general fund number rather than the all funds number, and while I do not understand why half of the State's total spendingis "off the books," either number proves my point so long as we're consistent. since 1960, all funds spending has increased by a factor of roughly 70 times. Inflation and population growth would have required only about 1/10 as much of an increase. Wouldn't it be great if we could all have a 90% State tax cut?

John said...

3 Times... As we discussed before...

jerrye92002 said...

The chart you provided showed the percent increases for each year and each biennium. Multiply all of those increases together and you get a number far larger that 3.0.

John said...

You have to adjust for inflation and population growth... Review the link and our past discussions.

John said...

And as we discussed previously, the 3 times is because of many factors. But mostly things like Medicaid and Special Education Mandates from the Federal government and courts. That is some BIG money.

John said...

Then you throw in that huge increase in single parent homes... And larger prison populations... Higher education standards and more kids attending higher ed... And health care increasing much faster than inflation... 3 times is probably pretty reasonable.

Though I do agree that Union support in the Capital drives the cost up some extra.

And the extra spend on environmental regs and DNR activities have pluses and minus.

jerrye92002 said...

I took all the numbers into a spreadsheet, and expanded the 1960 number by inflation and population growth every year. The result was a current-dollar value of the budget of roughly $3 billion, or an increase in real spending of ten times, not 3.

But perhaps more pertinent to the discussion is, why is state spending going up 8% over the next two years, and why does Dayton want still more? What is the added "value" NOW?

John said...

Someday I will update my numbers again to disprove that silly 10X number that you have had in your head forever.

I am not sure why Dayton wants more than 4% per year. I think it is his silly Liberal logic..

"Well we raised taxes and have the surplus, so let's spend it..."

John said...

Especially after these jumps.
2007 3.1%
2008 6.5%
2009 5.4%
2010 .4%
2011 5.6%
2012 -1.3%
2013 9.0%
2014 9.6%
2015 1.7%
2016 3.7%

It is odd that the MMB is not keeping their documents current.

John said...

On the other hand it looks like population grows by ~1.5% per year, inflation is ~2.0% healthcare inflation is higher, a higher percentage of citizens are older (ie baby boomers) and if the Feds start cutting funding the State may need to raise more money...

So maybe ~4% year is low...

jerrye92002 said...

The number is not in my head, it's in an Excel spreadsheet and a chart made from those numbers.

Start with the budget as of 1960. Compute what the spending would be in each succeeding year by multiplying the previous year's number by the population growth, and then by the inflation number. Do that every year for which you have data, and at the end you have a number like $3.5 billion in actual, current dollars, while the current budget (at the time) was about $35 billion. That's ten times, if you do the math correctly.

So let's do a sanity check using your numbers. Take a 1.5% increase in population, and raise that to the 50th power (in other words, 50 years), that's a multiplier of 2.1. Then raise 2.0 to the 50th, which is 2.7. Multiply the two together and you get a multiplier of 5.65, not 3.0, and I'm guessing your inflation number is low.

John said...

Send the spreadsheet to give2get@live.com and I will be happy to check the numbers...

Otherwise when I get time and am real bored I will update and share my calcs.