The “Dismal” World of Public Finance

Scott has been covering the epic budget battle now going on here in Minnesota. The state’s dominant news organ, the Minneapolis Star Tribune, weighs in daily on behalf of the state’s public employees and the Democratic Party. Today its contributions included this headline: “U adopts ‘dismal’ $3.7B budget.” “U” is the University of Minnesota, which for budget purposes includes five campuses:

The University of Minnesota adopted a $3.7 billion budget Monday that Robert Bruininks, just days before stepping down as U president, called “dismal” and “one of my most disappointing acts.”
Bruininks’ final budget raises tuition, shaves employee benefits and reduces faculty and staff to grapple with a potential “worst-case scenario” of a $70.8 million cut in state funding from this year to next. That cut was approved by the GOP-led Legislature but vetoed by DFL Gov. Mark Dayton and is one piece of the larger state budget impasse. …
During discussion before the vote, Bruininks and several regents bemoaned falling state funding.

Well, if the budget is “dismal” it must be getting cut, right? How big a decline would it take for you to say that your family’s budget is “dismal” and “disappointing?” Ten percent? Twenty?
Actually, $3.7 billion struck me as an enormous budget. Mindful of the fact that in government it is rare for anything actually to be cut, I checked to see how much the University’s budget will decline in the coming fiscal year, FY 2012–a statistic that is nowhere hinted at in the Star Tribune’s article.
Here are the University’s budget numbers for the fiscal years starting in 2000, according to the Univeristy’s own web sites:
FY 2000: $1,816,000,000
FY 2001: $1,886,000,000
FY 2002: $2,005,000,000
FY 2003: $2,118,000,000
FY 2004: $2,098,000,000
FY 2005: $2,201,000,000
FY 2006: $2,368,000,000
FY 2007: $2,532,000,000
FY 2008: $2,747,000,000
FY 2009: $2,902,000,000
FY 2010: $2,900,000,000
FY 2011: $3,400,000,000
FY 2012: $3,700,000,000
So the University’s own numbers indicate that the “dismal” and “disappointing” FY 2012 budget represents a $300 million, 8.8% increase over FY 2011. Will your family’s budget rise by 9% next year? Probably not. Only the world of public finance is protected from economic currents large and small. Governors and legislatures come and go, taxpayer revolts arise from time to time, but government budgets go in only one direction: steadily upward.

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