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Another positive economic forecast for MN

Monday, March 4, 2013

To the editor,

The work we did in 2011-12 is evident once again in the form of a positive economic forecast from Minnesota Management & Budget.

The last four semi-annual reports show a combined $2.8 billion more in state revenue than previously projected. This includes the recently issued February forecast, which indicates a positive balance of $295 million for the 2012-13 biennium.

The good news also extends into future years. Our shortfall for 2014-15 shrank by $463 million, down from $1.1 billion last November and $4.4 billion to end 2011. The MMB report also predicts a $782 million balance in 2016-17, up from $263 million in the last forecast.

It has been a handful of years since the out-year totals were a combined positive number. We are now seeing the return on difficult decisions we made in 2011-12. Our goal was to deliver better state services at a better cost, eliminating or improving inefficient practices along the way. Our bottom line is better for it.

We have paid back the full balance of K-12 funding which was delayed in 2011, but some debt remains from the previous Democrat majority and Gov. Tim Pawlenty. We will put $290 million of our current balance toward that balance, bringing it down to $801 million.

The remaining $5 million in more-than-projected revenue will be put into state reserves, bringing that once-depleted balance to nearly $700 million.

One of the biggest concerns I now have is that legislators will follow Gov. Mark Dayton’s proposal to raise taxes by $3.7 billion in order to increase spending more than twice as fast as revenue is increasing. We do not need to raise taxes in order to balance our budget. What we need to do is stick to our priorities and keep spending under control. Revenue is growing by 3 percent and the only reason we would have a shortfall is if we exceed that threshold.


A Health Insurance Exchange (HIX) bill is advancing through the House. I have a number of strong concerns over this program, including everything from operating costs to data privacy issues. It would cost us more than $200 million to set up and $54 million annually to run.

There are three components to the exchange: IT connections, a website and a board of controllers.

The IT connections are lines of online communication between the federal agencies and state agencies to impose Obamacare controls through access to your private medical, tax, family, employment, income and other data. Information would be reported to federal agencies like the IRS and the Dept. of Homeland Security for 'compliance' purposes.

The exchange Board will enforce your state's compliance with federal law and regulations. This agency would be subject to limited legislative oversight and have broad authority over our robust health insurance market.

This is not your basic “Travelocity for health insurance.” In fact, it reaches far beyond Obamacare mandates and severely curtails free-market choices in healthcare.


Rep. Joe McDonald



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