Monday, June 25, 2007

A wise man says 

Jim Knoblach, former state representative from here in St. Cloud and former chair of the MN House Ways and Means Committee -- meaning, the guy who knows the budget as well as anyone in MN -- has a Your Turn in today's St. Cloud Times (which, unfortunately, is not up on the Times' website. UPDATE: Randy Krebs, the opinion editor, acted fast and got the article up. Thank you Randy! Link is updated) In it he points out that if the DFL wants to have inflation figured in budget forecasts it need only do one thing:
I said at the beginning that some legislators want to have their cake and eat it too.

What did I mean? Simply this: If big-spending legislators want to have inflation included in current forecasts, all they need do is pass laws mandating that all programs get automatic inflationary increases.
So why, do you think, doesn't the DFL do this?
Personally, I think this would be a terrible idea. Yet even big-spending legislators are unwilling to propose this, in part because they might have to make unpopular spending cuts the following year if there was not enough tax revenue.

It is far easier to advocate for a forecast that assumes everyone gets an inflationary increase, than to have to make the tough choices that might come if you pass laws that actually give one.
And to those who think having inflation would the budgeting easier, Knoblach also has some tough words:
Most recipients of state tax dollars assumed they would get an inflationary increase, and then added their wish list on top of that assumption when presenting their budget request.

In addition, determining the actual budget base for an agency was confusing. Legislators weren�t always sure if the base budget numbers they received were the amount an agency was legally authorized to spend, or authorized spending plus inflation.
Having no inflation in the expenditure forecast, except for those spending items indexed by law, provides more rather than less clarity.

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