While state budget forecasts improve, Gazelka advises caution
The November budget forecast is a pleasant surprise and news of a new COVID-19 vaccine is encouraging, the senate majority leader said, but the state isn't in the clear yet.
With new budget forecasts and news of a COVID-19 vaccine rollout on the horizon, the state of Minnesota — and the nation at large — could be on its way to stabilizing after a dizzying tailspin of a year.
However, there’s reason for a healthy dose of caution, Senate Majority Leader Paul Gazelka, R-East Gull Lake, said during a phone interview Wednesday, Dec. 9. Coronavirus cases are still surging across the nation. The November budget forecast is, by Gazelka’s estimation, the least accurate of the budget forecasts. And how COVID-19 vaccines will be disseminated to the public in coming months remains to be seen, though it will require targeted inoculations to specific at-risk populations or professions in the early stages.
Still, there’s much to be thankful for, Gazelka said. There’s still plenty of uncertainty, he added, but a light can be seen at the end of the tunnel and the state may not have to take additional drastic measures to save lives, small businesses, or state institutions during the pandemic.
Gazelka faced criticism in recent weeks over his personal conduct during the pandemic. While the Republican leader has advocated for wearing masks to protect vulnerable people in the 70-plus age bracket, his own mask usage has been inconsistent. The senator has been documented not wearing a mask while he interacted with older constituents on numerous occasions, both in St. Paul and during local political gatherings. He, alongside other Republican state lawmakers, tested positive for COVID-19 in mid-November.
In a surprising development, the Minnesota Department of Management and Budget’s November statewide budget forecast projected the state was in line for a more than $600 million surplus — in large part, the forecast noted, because of significant spending reductions state lawmakers enacted earlier this year.
That’s quite a turnaround from the May forecast, which had the state staring at a daunting $2.4 billion shortfall. The May forecast had been, in turn, an enormous reversal in fortunes after the same agency forecast a $1.5 billion surplus only a few months earlier in February 2020. In many respects, it’s been a microcosm of the deeply unstable and unpredictable nature of economic forces during 2020.
However, while Gazelka said he was heartened by the forecast, he said the November budget forecast has been historically the least accurate or trusted of these forecasts. He said Minnesotans need to look ahead to the February 2021 forecast for a more accurate reading and he noted it’s still possible the state economy will experience more upheaval and fluctuations to contend with before it can stabilize long term.
“It only means that we don't have a budget shortfall next year, but it does show that we have more than a billion dollars short for the next two year budget beyond that. That's what we will be working on this next year is the two year budget,” Gazelka said. “I still think it would have been far better if we had reduced some of the government spending, like other states chose to do, that would have put us in a much, much stronger position. … But the news is positive and that we're going to be able to get to the finish line better. We are not going to raise taxes on anyone.”
Walz has pushed for a more moderate approach that would incorporate tax cuts in some sectors, raising taxes in others, bureaucratic restructuring, job hiring freezes and other measures to balance the budget.
Gazelka cautioned more upheaval may be in the cards, as well as more struggles for small businesses and municipalities in the coming half-year or so.
“I still think we're going to see a lot of fluctuation,” Gazelka said. “We have what appears to be a transition in power at the presidential level that creates a lot of unknowns. People don't know how things are going with the vaccine rollout.”
However, Gazelka was critical of Gov. Tim Walz. He warned the long-term livelihood of many small businesses could be in peril because of stringent measures the DFL administration took to curb the spread of COVID-19. In response, Gazelka said the Minnesota Senate is looking at a relief package for small businesses in the hundreds of millions that would be reserved for businesses that have seen a 30% or more reduction in revenue this year. Walz has called for the Minnesota Legislature — which has primary authority over the state’s finances — to pass relief packages targeted toward struggling small businesses and workers.
“Most of the relief is a federal issue,” Gazelka said. “They have to help the states, and I do know that they're trying to pass one, two, or somewhere around a billion dollars that would provide more relief for small businesses.”
Gazelka estimated it will take roughly less than half a year for people to get the COVID-19 vaccine. Much as he’s done during the pandemic, Gazelka said the most vulnerable populations — namely those 70 or older, or specifically those in long-term care and immunocompromised — should be first in line for the vaccine. These should be followed by frontline health care workers, then some sectors, like education, and essential service positions that can’t be done remotely or practice self-isolation.
In particular, Gazelka identified key nonpartisan workers and vulnerable lawmakers in St. Paul — who need to interact in person to pass the state’s budget or any relief packages — as people who should also be at the front of the line to get vaccinated. With relief packages stalling in Washington, D.C, and talks breaking down in Congress over how the U.S. government should address struggling businesses, families and workers, Gazelka said, it means keeping the state working effectively until the vaccine is distributed is vital.
“I believe it will take somewhere around five months to get out to all the people that want it,” Gazelka said. “If we continue to keep these businesses closed and the federal government doesn't help, there's only so much that the state can do to help.”
Gazelka praised President Donald Trump’s handling of the vaccine as a “crowning achievement” where the Trump administration fast-tracked U.S. Food and Drug Administration trials of the vaccine and paid for its dispersal in advance. Reports indicate, however, the Trump administration repeatedly declined to purchase more Pfizer vaccines for usage in the second quarter of 2021. And Pfizer, with the first vaccine available on the market, was not part of Trump’s Operation Warp Speed effort. Gazelka also praised Walz and state lawmakers across the board for cooperating with the Trump administration in a way that benefits Minnesotans.
Ultimately, Gazelka said, he’s not in a position to decide how and where and how much vaccine is distributed. Much like his dealings with the federal government, he can only advocate and try to do his best to work around those external developments.