Minnesota Management and Budget announced last week that the state will have a surplus of an estimated $17.6 billion on account of strong collections and lower-than-projected spending.
That could be good news for taxpayers facing a recession, who could each stand to have $6,000 returned to them.
However, the state’s pro-shutdown teachers’ union wants to gobble up over $5 billion of the surplus. With the Democrat-run government onside, it is likely to have its way.
What are the details?
In its latest economic forecast, the MMB indicated that $4.55 billion had been added to the general fund bottom line in the current biennium.
“Despite a mild U.S. recession projected for 2023 and a lower tax revenue forecast in the next biennium, the large leftover surplus from the current biennium carries into FY 2024-25 and combines with significant structural balance to generate a projected $17.616 billion balance available for the next budget,” said the report.
The state’s teachers’ union, Education Minnesota, wasted no time with a recommendation for where it reckoned that money ought to go.
The union issued a statement on Dec. 6, suggesting this sum “provides a once-in-lifetime opportunity for short-term investments in Minnesota students, but increased support over many budget cycles is necessary to meet the challenges facing public education.”
Education Minnesota president Denise Specht said, “The governor and Legislature have a huge budget surplus because at the end of the last session they failed to spend billions of dollars on the things that benefit all Minnesotans, including public education where schools are understaffed and students are struggling.”
After criticizing Republicans, Specht stated, “It’s time for Gov. Tim Walz and the leadership in the House and Senate to spend the state’s resources to improve the lives of working Minnesotans.”
The Center of the American Experiment, a Minnesota think tank, broke down the amount potentially up for grabs, noting it “equals about a third of the [state’s] total budget.”
Unlike Specht, American Experiment was more inclusive when contemplating “working Minnesotans” who could stand to benefit from these funds.
“Minnesota has a population of 5.7 million. If the surplus were divided equally among all Minnesotans, each person would get about $3,100. For a family of four, that amounts to $12,400,” reported American Experiment.
Alternatively, if the surplus was evenly divided amongst every income taxpayer registered in 2019, then each Minnesota taxpayer would get $5,860.
Incoming Republican House Minority Leader Lisa Demuth thinks some form of rebate would be a prudent use of the money.
“So much of the surplus is one time spending, it’s one time money. So we need to look at possible one-time rebates to our tax filers,” said Demuth. “This is Minnesotans’ money, and it is not a reason for the government to create new or governmental spending.”
Specht, who previously claimed that America “WAS built on white privilege and by racist systems,” does not have such an equitable distribution in mind.
“Minnesota schools are chronically underfunded,” said Specht. “To give students more time with their educators, healthy learning environments and access to a sufficient number of professional educators of all kinds, the state needs to make up for funding lost to inflation and then go farther to create world-class schools for all Minnesota students — no matter what they look like, where they come from or where they live. It will require a multi-billion-dollar, multi-year commitment from the state.”
WCCO reported that the union will be pressing the legislature for more than $5 billion, extra to the $20 billion that is already going to E-12 education in the 2022-2023 biennium, representing nearly 40% of the state’s budget.
In the next biennium, E-12 education will receive $21.25 billion, over $3.4 billion more than what Health & Human Services will receive in state funding.
The union and the party running the state government are on good terms, and not just because the Democratic governor is a former teacher.
Education Minnesota endorsed a full roster of state Democrats ahead of the midterm elections. Those endorsements and the union’s PAC donations may help determine how the surplus is ultimately budgeted.
The Minnesota Reformer indicated that with Democrats holding the state House, the state Senate, and the governor’s mansion, they have an opportunity “to fulfill a policy wish list long in the making among progressive activists, labor unions and wealthy donors.”
Walz has signaled that Specht may have her way, saying, “Now’s the time to make sure that those classrooms are funded with the things that they need to do to make our kids the best qualified workforce in the world.”
The Democratic governor also indicated that rebate checks may be a possibility, reported Minnesota Public Radio.
With the teachers’ union likely eating into the surplus, these rebates would be a fraction of what American Experiment calculated.
Union leaders will do fine regardless
Specht is clear that she wants union members’ lives enriched, but it is unclear if that enrichment will one day resemble her own.
According to the Duluth News Tribune, during the 2020-2021 school year, the union brought in $32 million in union dues and agency fees, but only spent $10.4 million in representational activities. It instead spent $3.3 million on political activities and lobbying, and another $2.8 million in contributions, gifts, and grants.
While teachers allegedly struggled, their dues topped up the union leaders’ salaries.
Specht made $211,639 between September 2020 and August 2021, according to U.S. Department of Labor filings.
The union’s vice president, Bernadette Burnham, reportedly made $216,796, and its treasurer, Rodney Rowe, made $216,722.