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Jan 27, 2009 9:09 pm US/Central
Pawlenty's Budget: 2.2 Percent Spending Cut
ST. PAUL (AP) ―
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Minnesota Governor Tim Pawlenty (R-MN).
Paul. J Ricahrds / AFP/Getty Images
Gov. Tim Pawlenty aims to erase half of Minnesota's projected $4.8 billion deficit by slashing state aid to cities, counties and hospitals, eliminating health care coverage for 84,000 adults and cutting most state agency budgets.
For the other half, he is looking for cushions -- an accounting shift here, tobacco payments there, and a major hand from the federal government.
The two-year, $33.6 billion budget outlined Tuesday by the GOP governor would trim spending slightly more than 2 percent from current levels as it attempts to refocus everything from public school classrooms to drug treatment to adoption programs as the nation's recession grinds on.
"This budget involved some tough decisions -- we realize that," Pawlenty said at a news conference. "But we also believe they are decisions that reflect the priorities needed to position Minnesota for the future, and to pivot and prepare for that future."
The package eases the state's red ink by delaying $1.3 billion in payments to school districts into the next fiscal year. It would bring in nearly $1 billion by selling 20 years of proceeds from an ongoing stream of tobacco settlement payments.
And Pawlenty put in a $920 million placeholder for federal aid -- a number he expects to be larger, perhaps significantly so. That depends on how an $825 billion stimulus plan working its way through Congress turns out. Under some analyses, Minnesota could get more than $3 billion, though not all that could be used to plug the hole in the state budget.
His budget also includes $287 million in business tax cuts, $323 million in new spending, mostly for public schools, and a $250 million replenishment for the state's empty rainy-day account.
Mayors from around the state said the cuts would hit people where they live -- through diminished public safety, higher property taxes and reductions in snowplowing, parks and libraries.
"Here's what it means for families: The loss of thousands of jobs, huge increases in property taxes, cuts in core services in our community such as police and fire protection, libraries and parks and pothole repair," said Wadena Mayor Wayne Wolden, president of the Coalition of Greater Minnesota Cities.
He added: "For us that's going to mean that we're going to plow our streets every other blizzard."
Initial reaction from Democrats who control the Legislature was muted.
"This budget appears to be full of some gimmicks and we are going to take a close look at that," said DFL House Speaker Margaret Anderson Kelliher. "It's not to say that at the end of the day, some of those things -- they may work in this situation because of how bad it is."
"There's a general understanding that this is going to take some shared sacrifices," said Senate Majority Leader Larry Pogemiller, DFL-Minneapolis.
Republicans said they hope to see the Democrats' budget plan soon.
"This was not an easy budget for the governor and his staff to put together," said Senate Minority Leader David Senjem, R-Rochester. "It is a beginning."
The current budget hole is even deeper than the $4.2 billion shortfall Pawlenty faced in 2003, his first year in office. And Pawlenty and others expect that problem to grow in about a month, when forecasters factor in the latest job losses and continued economic turbulence.
His budget blueprint starts a difficult debate that will dominate the next four months of the legislative session -- and possibly sprawl into the summer if agreement can't be found. Legislative Democrats hope to avoid some of the cuts and are expected to unveil their own plan in the coming weeks or months. But first, they have vowed to take Pawlenty's recommendations before the public for hearings across the state.
The final product typically emerges from closed-door negotiations.
State leaders don't have as many options for the deficit as they had in 2003. That year, they leaned heavily on a tobacco endowment and rainy-day funds to lessen the shock. This time, there are no reserves and the downturn is expected to drag on.
In December, Pawlenty trimmed aid to local governments, higher education, a smattering of health and human services programs and most state agencies to fix a short-term $426 million deficit. Another such gap might open up -- requiring another round of immediate cuts, or possibly federal help -- before the state closes the books on the fiscal year at the end of June.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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