Fighting the Good Fight in Minnesota

You may have seen the news that the Minnesota government has been shut down over the lack of a budget. Democrat-Farm-Labor (DFL) governor Mark Dayton (pouty-faced) has rejected the budget from the Republican run legislature, calling it draconian. The dispute is pretty simple. The Republicans want to hold the line on the budget and the governor does not. The cause of most of the budget woes come from increases in the Health and Human Services budget, which was previously papered over.

“We were given about $1.5 billion in stimulus dollars last time to help us weather the storm,” said Sen. Kathy Sheran, a Mankato Democrat who serves on the Senate Health and Human Services Committee.

Good to know the stimulus dollars were going to productive ends, like putting off the day of reckoning for state budgets. Meanwhile, the health care costs that make up 79% of the HHS budget in Minnesota are going up. The Republicans are right to come to grips with this reality, or it will consume future budgets with nothing but tax increases forever. From the same article:

Under current policies, the spending just for Medical Assistance would increase to $9.7 billion and would consume 79 percent of the HHS budget.

About half of the jump in costs is due to the aging population, which is creating an ever-growing number of elderly citizens in need of care, and growth in the number of low-income Minnesotans eligible for state-provided medical insurance, according to a nonpartisan legislative fiscal analyst. The other half of the skyrocketing price of Medical Assistance is inflation in the cost of medical services.

If Republicans wanted to be really bold, they might propose an insurance voucher plan to reign in these costs. Between rising costs to carry on business as usual, and the weight of increased pension obligations, we can anticipate more such fights in other states.

Interestingly, even some Democrats seem to be taking the issue of state spending seriously, even as their union supporters grumble about being betrayed. The math is inexorable. States that have kept government in check like Texas and Indiana are going to grow as businesses relocate. Reminds you a little of Atlas Shrugged, perhaps? (Shane, that's for you.)