ITS TIME TO CUT UP THE CREDIT CARD

GOP Running Up Taxpayer Debt with Irresponsible Borrowing

Instead of asking millionaire Minnesotans to pay the same in taxes as hard-working, middle-class Minnesotans, Republicans in the Legislature irresponsibly authorized the sale of tobacco securitization bonds. The tobacco bond proceeds will fill $640 million of the 2012-13 budget deficit. Despite repeated Republican claims to the contrary, they first proposed and advocated for the sale of tobacco bonds.
(MPR: A timeline of last, best offers http://minnesota.publicradio.org/collections/special/columns/shutdown/archive/2011/07/a-timeline-of-last-best-offers.shtml)

Minnesota will pay hundreds of millions of dollars in interest in order to receive $640 million for spending today.

The total cost comes to a whopping $576 million. In other words, the cost of borrowing is nearly as much as the revenue received in return. The money needed to pay off this debt should be going to much more worthwhile causeseducation, economic development, and property tax relief.

Minnesota has never before issued securitization bonds.

The State has never before issued securitization bonds to fund ongoing programs. Thanks to Republicans, Minnesota is basically engaging in the same deficit spending that weve grown tired of seeing in Washington. This isnt solving our long-term problems and will leave us saddled with debt and deficits in the future.

Republican actions and refusal to compromise downgraded Minnesotas credit rating and financial reputation.
Citing political intractability and reliance on one-time measures like tobacco bonds, Moodys downgraded Minnesotas outlook from stable to negative this past August. Standard and Poors followed suit in September, downgrading Minnesotas AAA credit rating to AA+. Fitch downgraded Minnesotas credit rating during the government shutdown (in July 2011) from AAA to AA+.

Republicans are open to continuing the irresponsible use of the states credit card.

House Republican Tax Chair Greg Davids, who carried the legislation that took this unprecedented step, is open to using this option again: Once youve already done it, its something Im sure everyone will be looking at again, House Taxes Committee Chairman Greg Davids, R-Preston. (AP, 11/8/11) We need a permanent solution to our budget problems, not more irresponsible borrowing. Its time to cut up the credit card and get to work on creating a more prosperous Minnesota with good jobs, a strong middle class, and a high-quality education for all our children.
Produced by the House DFL Media