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Ventura proposes spending cuts, tax increases to fix deficit
By Laura McCallum
Minnesota Public Radio
January 10, 2002
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Gov. Ventura has outlined his plan for addressing a nearly $2 billion projected budget deficit, and there's plenty of pain to go around. He's proposing cuts in every major area of the state budget, and increased taxes on gasoline, tobacco and some services. Legislative leaders didn't find much to like in the plan.

Gov. Ventura
Pam Wheelock, Commissioner of Finance
Matt Smith, Revenue Commissioner
Question-and-answer session

Ventura says he didn't hide behind quick fixes or short-term solutions. He says he made the tough decisions to fill the $2 billion hole in the state budget.

"You think I wanted this situation? Absolutely not. But you have to deal with it, I'm willing to deal with it, it's my job. We used to always say in the Navy, you don't have to like it, you just gotta do it," Ventura said.

Ventura's plan spreads the pain around through a combination of spending cuts, tax increases and drawing down the state's budget reserves.

The biggest item on the list is the $700 million in spending cuts. They affect every area of the state budget.

"While these cuts are substantial and widespread, I believe that they are fair. For example, my department will experience permanent cuts of anywhere from five to 10 percent, and my office specifically will be cut a full 10 percent," the governor said.

Ventura says he tried to spare students by recommending a less-than-one-percent cut in K-12 education funding this bienium. Aid to cities and counties suffered the biggest blow with a five-percent cut. Ventura cuts higher education 2.5 percent, and health and human services 1.5 percent.

DFL Senate Majority Leader Roger Moe of Erskine says he's concerned that the cuts may penalize Minnesotans who were already hurt by actions in the last legislative session. Listen to his comments.
(MPR Photo/Laura McCallum)

On the revenue side, Ventura wants to increase the state's 20-cent-a-gallon gas tax by five cents. But the extra money will mainly be used to fill a budget gap created by Ventura's cuts in license tab fees. Ventura also wants to extend the sales tax to car repairs, newspapers and magazines, and legal services, and raise the state's tax on cigarettes from 48 to 77 cents a pack.

"If you don't want to pay a tobacco tax, don't smoke. I smoke cigars. I'm going to pay," he said.

Ventura's proposed tax increases were immediately criticized by fiscal conservatives. They accuse Ventura of breaking a campaign promise. As a candidate for governor, Ventura pledged to veto any tax increase. He says that's because he was campaigning during a time of budget surplus.

"When you're getting in budget surpluses, there is no excuse to raise taxes when you're already taking in more money than what you need. But who could've saw Sept. 11?" he said.

Ventura says Minnesota's budget shortfall is a direct result of the terrorist attacks and the national recession. Some legislative leaders argue that another factor is the tax bill pushed by Ventura last session, which overhauled the state's property tax system.

DFL Senate Majority Leader Roger Moe of Erskine says Ventura's budget plan fails to revisit those tax changes. Moe says if the governor wants to leave everything on the table, he should include the tax bill.

Republican House Speaker Steve Sviggum says the tone of the plan is something that will not pass the House. Listen to his comments.
(MPR Photo/Laura McCallum)

"Before we get on to talking about the Ventura tax increases, we should probably take a second look at the unintended consequences of the bill that was passed last summer, because a lot of people got tax increases under that bill," Moe said.

The governor and House Republicans say re-opening the tax bill is off the table. Republicans were also swift to attack Ventura's proposed tax increases.

House Majority Leader Tim Pawlenty of Eagan, who is also campaining for governor, dubbed the proposed hikes "Jesse taxes."

"Watch your wallet, because the Jesse taxes are coming after you, and we're not going to let him do that," Pawlenty said.

House Republicans say they also won't consider cuts in funding for schools and nursing homes. Ventura says there's no way they can balance the budget that way.

"If the House Republicans think they can do this without increasing taxes, and not touching K-12, not touching nursing homes, not touching local aid to cities, I welcome their plan. Let's see it. Deliver it," he said.

House leaders say they will deliver their plan in early February. In the meantime, House and Senate leaders say they'll begin holding hearings on the governor's plan next week.

Expect plenty of references to the "Ventura tax increase" from legislative leaders, some of whom are angling for Ventura's job.

More from MPR
  • Plan gets chilly reception from all sides
  • School cuts smaller than expected
  • Midday analyzes Ventura's proposals Instant reaction from state officials, legislative leaders and other affected by the proposals. (1/10/02)
  • Issue page: State finances

    More Information
  • See Ventura's proposals Minnesota Department of Finance Web site