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The four major parties' endorsed gubernatorial candidates met Tuesday to make their pitches to metropolitan business leaders. The debate was hosted by the MetroNorth and Minneapolis Regional Chambers of Commerce in the northwestern suburbs. Discussion focused on improving the business climate in Minnesota - and included an apparent change of heart from one candidate on funding for a new commuter rail line along the Interstate 94 corridor.
This year's legislative debate included a tense standoff over the proposed Northstar Commuter Rail line linking downtown Minneapolis and St. Cloud. The Ventura administration wanted $120 million for the project, and even tried to use the state's capital improvements bill as leverage to force lawmakers' hands. It didn't work. Opponents of the project, mainly House Republicans, held firm and the funding never materialized.
But now, House Majority Leader Tim Pawlenty says he's given the issue a second thought. A new cost-benefit analysis shows the project could return 84 cents on the dollar - far greater than the 26 cents projected in an early planning document. Pawlenty told chamber members that if those new numbers hold up, he's open to Northstar funding.
"One of the expectations I would have for any transit corridor is - it has to demonstrate a level of effectiveness or efficiency, whether it's Northstar, whether it's light rail, whether it's a bus corridor. And we can measure that," Pawlenty said.
The debate was held in Fridley, not far from where the proposed rail project would pass, and where the debate takes a special meaning. But Pawlenty says his position hasn't changed - the underlying economics have.
DFL endorsee Roger Moe says he, too, supports the project and always has. And he says that he would have unique access to federal funding through two Minnesota congressmen - fellow DFLers both - who hold significant influence over federal transportation dollars.
"I'm probably the only one that can go back to the two most critical people in Congress - Congressman Sabo and Congressman Oberstar - work with them to move that up the priority list in Congress," Moe said. "To make sure the we don't lose the...$150 million that it looks like we might lose now because we haven't moved forward on it."
Moe also said he'll support a gas tax increase to boost transportation spending. Pawlenty has ruled out any new tax increases, but says he'd borrow $2 billion to jumpstart road construction.
Independence Party endorsee Tim Penny, who also supports the Northstar line, says borrowing that much money is irresponsible.
"I have a little problem with all these, 'You can have everything you want, but you don't have to pay for it now. Over the next 30 years somebody else will pay for this,'" Penny said. "I don't mind borrowing a little bit for our road construction needs. But in terms of our basic infrastructure, we need to pay for that through gas tax revenues."
Green Party candidate Ken Pentel says, he, too wants to see more rail options for Minnesota commuters. But he also stepped out on a limb when, speaking in front of business owners, he called for a fundamental shift in how the state conducts business.
"I don't agree with a growth economy. I believe in a sustainable economy. I do not believe consumption for consumption's sake is healthy," Pentel said. "I believe we have too many redundancies in society. When we get our electric bill every month, we see the price of that electricity. But we're not being told the whole cost of managing 10,000 years of nuclear waste."
Pentel says many business transactions contain hidden environmental costs that can be captured through increased oversight or taxation. When asked what, specifically, he would do to help the state's small businesses, he said he has a five-year plan to revolutionize health care access.
"We will pull the health care premiums off the payroll taxes for business in the state of Minnesota," Pentel said. "And we will use the MinnCare system as a one-payer system. And we will make sure that we are practicing what every other industrialized democracy does for its people. It covers everybody."
Pentel says the move would save businesses the cost of providing ever more expensive health insurance. But he acknowledges funding would have to be generated through state revenues, including the income tax.
Pawlenty says small businesses need a welcoming tax and regulatory environment to flourish - and he defended his pledge not to raise taxes despite a projected $1.6 billion budget deficit. Pawlenty says the funding shortfall reflects the automatic growth in state spending, due to increased costs and a growing population. He says he can therefore balance the budget without cutting spending, but by simply slowing its growth.
There's going to be some increases in some things. Some things are going to grow more slowly when I'm governor. Some things are going to be held flat. Some things are going to be reduced. And some things are going to be eliminated," Pawlenty said. "But I'm the only candidate up here, I think - I know - who's going to talk about accountability and reform and change - not just solving problems by throwing more money on the pile at every turn."
Moe, however, was skeptical. He says schools and local governments depend on a certain level of state assistance. And he says even if a Pawlenty administration tightens the belt, problems don't go away - they only move down the chain.
"If the state doesn't meet its committment in education and health care, it forces the pressure back onto the counties and onto the school districts and, in fact, ends up on the property tax," Moe said. "And so, you have to be a little cautious with Tim here saying that he doesn't support any taxes."
Moe predicts that if Pawlenty sticks to his no-tax-increase pledge, Minnesotans will see their local property taxes expand to relieve the pressure. He says all options must remain on the table when dealing with the expected deficit. Moe, Pentel, and Penny have refused to rule out tax hikes.
Penny, however, took a shot at both Moe and Pawlenty. Penny says the two legislative leaders must carry significant blame for the state's fiscal condition. As majority leaders of the Senate and House, Penny says the pair took the easy road last session, and refused to make long-term changes to nurse the state back to fiscal health.
"The legislative leadership during the last session swept the current problem under the rug with borrowed money. And you can only spend that money once. Once you've drained the reserve funds, the rainy day fund, and everything else, you can't do that a second time," Penny said. "So we've got a problem that's rolling forward into the next biennium, partly driven by the shifts that are also part of this so-called budget deal."
Penny has previously defended the Ventura administration's approach to last year's budget headache. The governor proposed a mix of spending reductions, targeted tax increases, and a partial draw-down of the state's budget reserves.More from MPR