Column: Federal instability trickles down
We continue to stress how important it is for our state to live within its means. Another thing we must address is what to do if our means change.
More specifically, what do we do if the federal government is unable to meet its funding obligations to our state?
We anticipate the state will have $60.6 billion in revenue from all operating funds in the 2012-13 biennium. Approximately $20 billion of that total is from grants our federal government has committed to providing. The problem is our federal government is broke.
Wash-ington continues to borrow and sink deeper into debt, so we must prepare for the day the feds are unable to meet their obligations to Minnesota.
That is why I support a House bill (H.F. 545) which introduces federal insolvency planning legislation. It would require state agencies that get federal funds to make contingency plans in case the federal government becomes insolvent.
This is not a sky-is-falling approach, it is responsible action to help us weather the worst-case scenario. The insolvency bill helps our state ensure it can continue to serve our citizens in the event the federal government is unable to deliver on its funding promises. We should especially be on notice since the credit rating agency S&P recently released a negative short-term outlook for the United States, expressing strong concerns with Washington's ability to put our budget on a better path.
The refreshing thing about this bill is it marks a dramatic shift in thinking. Governments typically are slow to react to economic changes -- hence, the $5 billion shortfall Minnesota currently faces -- but this insolvency bill reflects an emphasis on planning for tomorrow.
Kurt Bills represents Rosemount in the Minnesota House.