U students' final project: balance the state budget

Share story

Students and their budgets
University of Minnesota students who balanced the state's budget. Clockwise from top left: Anissa Hollingshead, Elyse Baily, Nick Hannula, Abou Amara, Jackie Keaveny, Cami Connell.
MPR Photo/Tim Post

A group of students at the University of Minnesota has done what lawmakers so far haven't been able to accomplish.

They've balanced the state budget.

That was the final project for one class at the university this semester. The process has given students some insight into the challenge the governor and the Legislature face.

"We sat in a room and argued with each other for awhile," said Nick Hannula, a 23-year-old who just graduated with a Master's in public policy.

This year Hannula and others took a course called Balancing Public Budgets: Minnesota Budget Challenge. It's a class mainly for students interested in working in government.

The final project due last week was to fix the state's $5 billion deficit. Their final budget even had hundreds of millions of dollars in surplus.

They started with cuts — slashing $200 million from higher education and cutting the payments hospitals would get from the state. They saved another $600 million by continuing to delay payments meant for K-12 schools.

Hannula said they took the work seriously, even though it was just for a class.

"None of this stuff is easy to cut," Hannula said. "These are all things that go to real people, that are very much necessary to our present and future status of our state."

Abou Amara, 24, just finished his first year of graduate work at the university's Humphrey School of Public Affairs and said he agrees with GOP lawmakers on the philosophy behind cutting the state budget so it's sustainable in the future.

But as far as an all-cuts budget, as Republicans say they want this session, Amara said that didn't work out in their scenario.

"Mathematically, yes. Factually, and I think pragmatically, I don't think it's possible," Amara said. "I don't think you can balance this budget with all cuts."

The two students raised taxes in their budget project. And they dropped several tax exemptions, bringing in hundreds of millions of dollars in imaginary money to state coffers.

It turns out all of the students who took the budget course balanced the state's books through a mix of cuts and increases in revenue.

Part of the budget fix by graduate student Elyse Bailey, 27, was to raise everyone's income taxes slightly.

"My thought was that everyone needs to share the pain," Bailey said.

Bailey saw that as a balanced way to fix the budget, and hopes it might be politically feasible.

The assignment was not just to come up with a budget solution, but one that might also be acceptable to lawmakers and the public.

Jackie Keaveny and Cami Connell didn't raise income taxes in their budget. Keaveny said instead they cast a broad revenue net.

"We tried to look at the whole spectrum of revenue and spending cuts," Keaveny said. "I think that's something that would be more realistic than some of the proposals out there."

Connell said they dropped sales tax exemptions for services that businesses purchase like management consulting and computer services.

"We felt that the ones we chose, there were about four or five, we chose them because we felt they would fall on more corporate side businesses rather than small businesses," Connell said.

Connell said that would bring in plenty of revenue. But they also know in the real world, it would bring interest groups running to the Capitol in protest.

Like her classmates, 34-year-old Anissa Hollingshead relied on a mix of cuts and tax increases for high-income earners to balance her budget.

During a break from her job at Minneapolis City Hall, Hollingshead said the project taught her the only way lawmakers will get a balanced budget in real life is through compromise.

"Where can we make some agreements that it's not going to be exactly what I want and it's not going to be exactly what you want either, and it's going to be enough for both of us to say OK," Hollingshead said.

Hollingshead admits it's fairly easy to balance a budget when you're doing the work in groups of one or two like the class did.

The students in the class, a mix of Democrats and independents, say they tried to keep politics out of their decisions. The class was taught by Sen. Larry Pogemiller, a long time DFLer and former Senate Majority Leader.

The students budgets won't make their way to the Capitol of course, but the students in this story report they all earned As for their budget balancing work.