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Budget cuts, round one

Published (4/8/2010)
By Nick Busse
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Lawmakers promised quick action on balancing the state’s budget, and they delivered — the first one-third of it, anyway.

On April 1, Gov. Tim Pawlenty signed a new law that will cut $312 million from the state’s budget. Covering a wide range of programs and agencies, the law will reduce the state’s estimated $994 million budget deficit by nearly one-third, mostly through spending cuts.

The law marks the first of what are expected to be three budget-balancing bills put forward by the Legislature this year. The next two pieces will cover health and human services, and funding for schools. Speaking on the House floor March 29, Rep. Lyndon Carlson Sr. (DFL-Crystal) said the first round of cuts, though painful, will ease the pressure on those other budget areas.

“Making targeted cuts in these areas will allow us to protect education from cuts to the classroom and reduce the amount that must be cut from health and human services,” said Carlson, who sponsors the law with Sen. Richard Cohen (DFL-St. Paul).

House and Senate leaders negotiated a deal with the governor that includes many of the cuts Pawlenty wanted, but also cushions the blow for poor and disabled Minnesotans and local governments.

The largest cut, $111.3 million to local aids and credits, is less than half of what Pawlenty called for in his supplemental budget plan. DFLers said the governor’s plan would have harmed core government functions like police and fire services.

Likewise, the Legislature mostly spared student financial aid programs from the budget ax, despite a $47 million total cut to higher education. So, too, did they mitigate the governor’s proposed cuts to economic development programs — especially those targeted toward disabled Minnesotans.

In some areas, such as environment and transportation, the Legislature actually cut more than what the governor wanted, however. DFLers, who last year proposed a $1 billion tax increase package as part of their budget solution, were not altogether happy about passing yet another round of cuts.

“There’s a lot of us on this side of the aisle that didn’t get elected to hurt people like they’re being hurt in this bill,” said Rep. Tom Rukavina (DFL-Virginia). “We had a practical solution to balance the budget, but we don’t have a practical governor anymore.”

Republicans, for very different reasons, don’t like the bill either.

Despite making an “admirable set of cuts,” Rep. Keith Downey (R-Edina) said the law doesn’t address the state’s long-term deficit, which according to some estimates might reach the $5 billion to $8 billion range in the next biennium. Downey said permanent changes to government programs are needed to reduce spending.

“This Legislature is not dealing with fundamental reforms. We’re not dealing with the structural deficit that we have, and we’re just nibbling around the edges,” Downey said.

Republicans also criticize DFLers for what they see as a piecemeal approach to balancing the budget. The new law covers virtually every area of the state budget except for the two largest pieces: K-12 education and health and human services. Rep. Mark Buesgens (R-Jordan) compared voting for the first budget bill to taking out a mortgage on a house after only seeing a picture of it.

But DFLers counter that they can’t bring the other two budget bills forward. They’re on hold while lawmakers await confirmation of a proposed federal expansion of health care funding. If enacted, that expansion could solve as much as $400 million of the state’s remaining $682 million problem.

Moreover, there’s another holdup: lawmakers are also awaiting a pending Supreme Court decision on the constitutionality of Pawlenty’s budget unallotments last year. If the court rules against the governor, it could force a reinstatement of the funding he cut unilaterally, leaving the Legislature with an additional $2.7 billion budget gap to deal with.

House Majority Leader Tony Sertich (DFL-Chisholm) dismissed criticisms about the one-bill-at-a-time approach, noting that the DFL majority’s full budget plan, including education and health and human services funding, has already been spelled out in the House’s budget resolution. He also said it was important to move quickly to solve as much of the deficit as possible.

“Halfway through the session, we are going to solve a significant chunk of this budget deficit, and I don’t know why people are afraid of that,” Sertich said.

Most provisions in the law are effective April 2, 2010.

HF1671*/ SF3223/CH215

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