| For Immediate Release | For More Information Contact: |
| March 11, 2002 | Dan Wolter (651) 296-0640 |
St. Paul, Minnesota - On Monday, leaders of the Republican House of Representatives unveiled their second phase plan for balancing the state's budget. The plan "continues to protect taxpayers, schools and nursing homes," according to House Speaker Steve Sviggum (R-Kenyon). The plan uses a portion of the state's tobacco reserves, approximately $100 million in spending reductions, and other reserve accounts. As in the bipartisan balanced budget act enacted last month, no taxes were increased and no funding for local schools and nursing homes was cut.
"The deeper the hole, the harder it is to dig out," said Sviggum. "Obviously the revised forecast makes it necessary to come forth with this second phase plan to balanced the budget for this biennium. We went about this keeping in mind those same priorities we have had since the beginning of the deficit debate: no tax increases and protecting local schools and nursing homes."
Late last month, Minnesota's budget deficit was projected to be nearly $440 million larger than earlier expected, making a second fix necessary. The initial "phase one" bipartisan balanced budget agreement was enacted into law after overriding Governor Jesse Ventura's veto.
"The Senate is setting the stage for a major tax hike and Governor Ventura has had his plan to raise taxes on the table for two months," said House Majority Leader Tim Pawlenty (R-Eagan). "House Republicans strongly reject the notion that taxpayers are the one to blame for this budget deficit. State government doesn't need to eat more of what families earn it needs to hit the treadmill."
The state's tobacco reserve account would be tapped for $310 million under the plan, with $31.7 million coming from other one-time special revenue accounts.
The House Republican phase two budget plan cuts more than $10 million from the legislative budget, reducing state spending by more than $100 million with $61.6 million reduced in Health and Human Services, $3 million in Economic Development, and $6 million from Family and Early Childhood.
Sviggum and Pawlenty said the plan would be handled as several bills and would be making its way through committees on Tuesday with House floor debate beginning on Thursday. The phase two plan eliminates the budget deficit for 2002-2003. House leaders said a later "phase three" plan would significantly address the 2004-2005 deficit.
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