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Gov. Ventura says he could call a special session in January, if he and legislators can agree on how to deal with the state's nearly $2 billion budget shortfall. Ventura met with legislative leaders Tuesday and agreed to balance the budget for the next four years, which will make the problem even more difficult to solve.

	"There is going to be some bleeding. There is going to be some pain. There's no doubt about it," Gov. Ventura said after a meeting with legislative leaders. Listen to his comments. (MPR Photo/Laura McCallum)

Ventura and legislative leaders met for the second time since learning of the $2 billion hole in the state budget.

Republican House Speaker Steve Sviggum of Kenyon says they agreed on some ground rules for budget negotiations. "Make sure that any decisions we make will not jeopardize the AAA bond rating that the state of Minnesota has, make sure that we don't enter into short term borrowing, that any decisions we make will not provide that the state has to do short-term borrowing; those are basic guidelines which I think are prudent," Sviggum said.

The officials said they discussed such things as what would be considered a budget gimmick - something Ventura has repeatedly ruled out - and what would be considered legitimate accounting moves to deal with the budget.

But what may pose the most problems for the upcoming session is the decision to balance the budget for the next four years, instead of the required two years. It essentially means the governor and legislators can't rely on one-time money to deal with the deficit. They'll have to come up with about $1.2 billion of permanent spending cuts or tax increases.

	House Speaker Steve Sviggum said officials in the meeting agreed that they would avoid short-term borrowing to cover the anticipated shortfall. Listen to his comments. (MPR Photo/Laura McCallum)

Gov. Ventura says he's not looking for a quick fix, because that would only leave the problem for the next governor to solve.

"Whether I'm here four years from now, or whether someone else is the governor, I don't want it left on my shoulders that I left the budget in any worse shape than it was when I inherited it," he said.

Legislative leaders in both the House and Senate have said they won't consider cutting education or nursing home funding to balance the budget, but Ventura says with a deficit this big, everything is on the table.

"When we go through a structurally balanced four-year budget, there's going to be some bleeding; there's going to be some pain," Ventura said.

Ventura pointed out that the state's budget has doubled in the last decade. He has said he would first try to balance the budget through spending cuts, not tax increases.

Education advocates were disappointed with the governor's comments. Judy Schaubach, president of the state's teachers' union, Education Minnesota, says school districts are finding there's no more fat to trim, and any more cuts in education funding will result in teacher layoffs and larger class sizes.

	Sen. Majority Leader Roger Moe says he'll urge Ventura to consider tax increases, not just spending cuts. He says at this point, no one has ruled out raising taxes. Listen to his comments. (MPR Photo/Laura McCallum)

"Education is one of the things that we have a constitutional mandate to provide for all of our students. We certainly understand the budget challenges that we're going to have, but we can't shortchange our students," she said.

Ventura will present his recommendation for balancing the budget in early January. He says if he and legislators can agree on what to do, he might call them in for a short special session before the regular session starts on Jan. 29.

DFL Senate Majority Leader Roger Moe of Erskine says that would be a best-case scenerio. "If we've got all of this hanging when we come back in January, it's going to be a very difficult session," Moe predicted.

Moe says he'll urge Ventura to consider tax increases, not just spending cuts. He says at this point, no one has ruled out raising taxes.