From the Desk of the President (February, 2009)

The Budget


            If you did not listen to, watch, or read about Governor Pawlenty's State of the State speech last month, you should know one thing - it ain't pretty.  He is projecting a $5 million deficit and plans to fix it by cutting taxes for corporations and freezing wages for state employees and any entities that receive state money.  In my humble opinion, his proposal will plunge our state into an even deeper hole than the one we are in right now.  His analogy of a family sitting around the table and working things out when times are tough hit the wrong note.  I would like to think that our family - be it our Hennepin County family, our AFSCME family or our individual family - will always look at how we can meet the needs of the most vulnerable - the young, elderly and disabled; the educational needs of our children; the medical needs of everyone in the family; the need for a roof over our heads; food on the table and adequate clothing; and a way to provide decent transportation to get around and then look at how we can adjust our budget to achieve those goals.  I guess I just don't see us looking at reducing income sources to do that.  Instead, I suggest that we would look for ways to increase our income.   


            In order to build up our economy you have to have two sources of income: taxes - personal income taxes from earned income and corporate taxes - and people spending money on goods and services.  If you cut the tax obligation for businesses, you are cutting off a big chunk from that source of income.  Freezing wages for state employees - and any other employees of entities receiving state money (cities, counties, townships, schools, hospitals, etc.) - means that they will have even less money at their disposal to spend in their communities and there will less personal income tax revenue, too.  People will only buy what they need to get by and that will be food, clothing and medicine which is not taxed so no new tax revenue there for the state and community coffers.  We have already seen less buying at the gas pumps, less entertainment activity - movies, going out to eat, etc - so no tax revenue there.  I don't know about you but when I don't have money, I don't spend money. 


            I am a History major and the issues we are facing now remind me of the woes faced by our parents and grandparents during the 1930's and 1940's.  President Roosevelt recognized that our country could not hunker down and hope for some magic wand to appear to make things "all better".  He realized that it would take drastic action and that the country would need to create jobs so that families could survive.  The Public Works Program was one of the more effective tools his administration came up with to address the ills of the nation at that time.  This might be the time for another program of that depth and scope.  Getting people working will address both families having money to pay for goods and services - putting money and corporate taxes back into the economy - and tax income going up as they pay personal income taxes on their earnings which will mean a better budget. 


            The adage, "You need to spend money to make money." really is true.  If we want to see our economy take an upturn, we have to see money invested in creating jobs.  With more people working, it will follow that the state will see more money flowing into their coffers.  More businesses in the community will see residents coming into the stores to purchase goods and spend money on entertainment creating an increase in taxed goods.   


            What can you do?  Call or write your state and federal legislators to encourage them to support legislation to put money back into the economy.  Let them know that freezing wages is not the answer as it will actually reduce tax revenue.  Put your name forward to be one of the Local 34 Day on the Hill attendees.  Talk to friends, neighbors, coworkers and family about the budget.  Encourage them to contact their legislators.  I suspect that President Obama will start the ball rolling with his legislative agenda.  We need to be ready to roll up our sleeves for the work ahead of us.  It will be a long haul to fix the problems we face but we are up to it!