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Mar 17, 2009 7:07 pm US/Central
Pawlenty Uses Stimulus To Ease Minn. Budget Cuts
ST. PAUL (AP) ―
Gov. Tim Pawlenty backed off on some cuts in a revised budget plan Tuesday, relying on federal stimulus dollars even as he criticized them.
The Republican said he aims to reverse proposed cuts to universities and colleges, delay some health care cuts and send more money to courts and public schools. He is counting on $2.6 billion from the feds, about $800 million more than his administration forecast two weeks ago.
Minnesota faces a two-year deficit of $4.6 billion, about 13 percent of the budget, but the hole would be even deeper without stimulus aid. Pawlenty's revised budget avoids tax increases but sticks with two other plans to raise revenue -- a $1.3 billion accounting shift in school payments and nearly $1 billion from selling proceeds from tobacco settlement payments.
Pawlenty said Minnesota pays more to the federal government than it gets back, so the state is entitled to its share of the stimulus.
"We're going to follow the law and make use of it and we have," he said at a Capitol news conference. "But it turned into more of a spending bill in terms of the federal government than I think a targeted prioritized stimulus bill."
His proposal would cut hospitalization benefits for childless adults on the state-funded General Assistance Medical Care program, instead trying to manage their care through clinics and care coordinators. Pawlenty would also observe a federal stimulus prohibition on cutting eligibility for two other subsidized health programs, but only until January 2011, when he would remove childless adults and some parents from Medical Assistance and MinnesotaCare.
Pawlenty's plan would help counties cut jail costs by moving short-term offenders into state prisons. It also includes $28 million to remove income taxes from the first $2,400 in unemployment insurance benefits, matching Minnesota with the federal law.
The budget release sets the stage for negotiations that will consume lawmakers for the next two months.
Senate Democrats proposed last week to cut spending across the board and raise $2 billion in taxes, mainly targeting the wealthy. The House DFL is set to release a budget outline Friday, with proposals for higher taxes expected.
Pawlenty criticized the Senate DFL's approach to cutting and left no room for negotiation on taxes. He said it would take a large increase in the income tax rate for top earners to raise the kind of money Senate Democrats are aiming for.
"They would visit a massive tax increase on an individual making $65,000 or more, so this doesn't hit a small slice of Minnesota," Pawlenty said. "It hits a big slice of Minnesota and it would give us one of the highest income tax rates in the country."
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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