Minnesota Spending Run Amok

Bruce Kaskubar analysis Leave a Comment

© Bruce Kaskubar, 24 May 2009 edited 16 June 2009

How would the people of Olmsted county spend $568 million in one year? We might know if Minnesota’s taxing and spending weren’t so ridiculous. Those who think Governor Pawlenty is out of line for using his veto pen are out of touch with our spending history and the lack of leadership shown by Democratic leaders in St. Paul during the recently completed legislative session.

annual spending

annual spending

Please refer to the graph. The blue (top) line represents total state spending in billions of dollars for each year since 1960. The general shape of that line is known as an exponential curve. That means spending isn’t just growing, spending’s growth is growing! The orange (bottom) line represents what we would expect to spend each year if we just kept up with population growth and spent the same amount per person per year. The yellow line (next one up) represents what we would expect to spend each year if we just kept up with inflation. Finally, the green line (next one up) is what we would expect to spend each year if we kept up with inflation and population.

Based on inflation and population, if Minnesota did in 2008 what it was doing in 1960, we could expect 2008 state expenditures to have been $5.7 billion. The actual figure was almost $27 billion: 4.7 times more! Because it’s taking on more responsibilities, working fatter, and working dumber, our state government is almost 5 times more expensive than it was in 1960. (I don’t know if government is working fatter or dumber than it was in 1960 but it’s one of the possibilities for explaining the difference.) In 1960, our state government spent $149 per person. Adjusted for inflation, that’s equivalent to $1,084. In 2008, Minnesota government spent $5,144 per person: $4,060 more than we would have spent were we performing like 1960.

Governor Pawlenty is aware of this outrageous growth in government. He knows there is absolutely no need to continue feeding such a beast particularly in the midst of an economic down turn. The Democratic leadership ran town hall meetings in February that were filled with pleadings to retain various services and programs. One of their suggestions was to cut everything by an equal amount. That was thoughtless. It simply is not possible that every aspect of government responsibility is of equal importance and efficiency. Yet that is the only sound basis for identical across-the-board cuts.

So, Governor Pawlenty insisted that the legislature take a serious carving knife to our budget. The Democratic leadership in the legislature refused. He kept his word and used his veto pen. The multi-branched form of government worked for the people of Minnesota thanks to Governor Pawlenty.

Back to the graph. Forty-eight years is a long time. 1960 wasn’t used as the base year for any special reason other than that it was the first year for which state expenditures were found. There is only one year since 1960 that can be used as a base to show state spending has grown less than expected after accounting for population and inflation: 2003. And that’s questionable because population figures are estimated for those years. Even so, the difference is a meager four-tenths of 1 percent per year. Mind you, expenses still rose from 2003 to 2008 but only 40 cents out of a $100 bill less than expected based on inflation and population. Any base year other than 2003 yields government growth in excess of inflation and population (by an average of 1.9 percentage points). It may not seem like much but over 48 years, it means $21 billion of extra spending in one year.

Were we to take that $21 billion and disburse it evenly to 5 million Minnesotans, we’d each receive $4,060. Could the people of Olmsted county do anything useful, directly, based on their convictions, needs, and wants, with $4,060 per person? Olmsted county’s estimated population is 140,000 people. That’s $568 million for Olmsted county residents to spend in one year! But no, Democrats insist the state of Minnesota should have it; that we can’t spend our own money smarter than St. Paul can. That’s just nonsense.

If you’d like to check my work and sources, they can be found here.

UPDATE 16 June 2009

The Rochester Post-Bulletin published a second version of this article on June 13, 2009. I excluded some of the above points and added others, below.

When it comes to power and food and population, the green side of the Democratic party is all about sustainability. What about sustainability of government? Even without looking at the math, it’s easy to see that Minnesota’s growth in government expenditures has a nice curve to it. If it continues as it already has, in 40 years we’ll be spending $12,500 per person (in 2008 dollars). Guess what? That won’t actually happen because Minnesota will be bankrupt and most of us will be in Sioux Falls, Fargo, Eau Claire, and La Crosse. Go Packers. If it’s hard to cut government programs now because so many people are so reliant on them, how and when can it ever get any easier as government continues to grow? Do we just grow it until it collapses like a ruined car company? No.

Governor Pawlenty is aware of the growth in government. He knows there is absolutely no need to continue feeding such a beast particularly in the midst of an economic down turn. So, he insisted that the Legislature take a serious carving knife to our budget and, implicitly, make a small change in the role government should play in Minnesota. The Democratic leadership in the Legislature refused his wisdom. Now the Democrats say they will hold him accountable for whatever cuts he makes. Cute.

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