Outgoing MN Budget Commissioner reflects on ‘amazing’ 3 years
Minnesota Management and Budget Commissioner Jim Schowalter might need a chiropractor to help him with the budget whiplash he’s witnessed during two stints in the job. First under DFL Governor Mark Dayton when he had to help solve a $6.2 billion budget deficit and then under DFL Governor Tim Walz when he helped craft a plan to spend or give back nearly $18 billion.
“It has been an amazing three years,” Schowalter said of his second time serving as budget commissioner, appointed in the midst of a pandemic. “I came in September of 2020 and the situation looked a lot worse. And I couldn’t have imagined in my wildest dreams we’d have gotten to a $17 or $18 billion surplus and had the kind of legislative session we just got through.”
Schowalter says there are several reasons why the state weathered the pandemic economically. For one, the state made some prudent economic decisions early in the pandemic.
“We brought our anticipated revenue estimates down,” he said in an interview. “And that’s when I came in. We were worried if we were going to have enough cash on hand. But what happened is that our tax system in Minnesota worked. That the economy worked and that all of the sorts of disaster scenarios didn’t occur.”
He also says the federal government stepping in and paying many expenses for states through the pandemic helped the state save money that kept adding to the surplus.
Critics question whether the budget he helped craft with the governor and legislature will be sustainable. The budget passed in May increased spending 38% to $72 billion.
“You know, any budget in an economic downturn will have to be adjusted,” he said when asked if the budget is sustainable. “You might have to pull back some of your spending. You may have to look at your revenues. You may have to make some spending shifts. That’s what we do all the time.”
As for tax rebates that will go out this fall, ranging from $260 for singles earning less than $75,000 or $520 for couples earning less than $150,000, Schowalter says he initially wanted the rebates to be bigger.
“The governor and I both would have liked it to be a bigger part of the tax package, but at the end of the day the legislature has an important say in it as well and there were other things on the table that were their priorities,” he said.
Schowalter isn’t retiring, but just taking some time off before deciding his next career move. He will be replaced by the current Deputy Commissioner Erin Campbell who was appointed by Governor Walz this week.
You can see the entire interview with Schowalter Sunday morning at 10 a.m. on “At Issue with Tom Hauser.”