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Pawlenty names Dan McElroy finance commissioner
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Rep. Dan McElroy, 54, has served in the House for eight years. (MPR Photo/Tim Pugmire)

St. Paul, Minn. — Minnesota's next governor says repairing the state budget is his top priority. But Tim Pawlenty has pledged that the fix will avoid any tax increases. As finance commissioner Dan McElroy will guide Pawlenty in that challenge. Pawlenty says McElroy embraces his administration's core values of hope, integrity and change. He also describes his first cabinet appointment as a bold leader, budget hawk and human spread sheet.

"Simply put, Dan McElroy is one of the smartest, most hard-working change-oriented leaders that has come to state government in modern history," Pawlenty said.

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Image Gov.-elect Pawlenty introduces Rep. Dan McElroy.

Pawlenty is not only piling on the praise, but also the responsibility. The governor left no doubt that McElroy will be the key player in helping him deliver on his tax pledge.

"We are going to give him broad powers. This is somebody who fits into the model of you find excellent people and then you let them do their job. And his job is going to be to lead the efforts to manage the state's budget, to get it under control, to do that without raising taxes and to be the lead person in the administration on finance and budget matters. And we're going to full empower him to get the job done. We believe in him 110 percent," he said.

McElroy says no one person will balance the state budget. He'll rely on a team of people in the Department of Finance to craft a two-year spending plan. McElroy says the budget decisions will meet the governor's criteria and keep in mind that each number has a face behind it. "It may be the face of a state employee, or the employee of a city or a county or a private non-profit. It may be the face of someone who needs services or needs to be educated. But also it's the face of a taxpayer. And from very dollar and cent that gets spent in Minnesota comes from the pocket or purse of a taxpayer. And so we have to balance the faces behind the numbers," McElroy said.

McElroy has served in the Minnesota House since 1995. He's been chairman of the Jobs and Economic Development Finance Committee, the Legislative Audit Commission and the property tax division of the House Taxes Committee. Before his election to the Legislature, McElroy was the mayor of Burnsville for eight years.

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Image Pawlenty's first cabinet appointment.

He says he plans to start his new job by listening to other people's ideas on how to reduce state spending.

"This will not be a plan that has 10 elements or 100 or maybe not even a thousand. It's going to have a lot of pieces to it. And the plan is to listen to a lot of people and identify literally hundreds of opportunities and options and then evaluate them to see what are the best," McElroy said.

Both Republican and DFL legislative leaders give McElroy high marks for his budget-crafting skills. DFL Senate Majority Leader John Hottinger says McElroy is a good choice, but he faces a difficult job. Hottinger says he's still concerned the no tax increase pledge will result in unacceptable cuts in education and basic government services.

"The biggest fear is that the no-new-tax pledge will be changed into a no new state tax pledge, but hump all sorts of very difficult property tax burdens on Minnesota property taxpayers," McElroy said.

McElroy says the possibility of local government raising property taxes to make up for cuts in state aid is a real concern. But he isn't ruling out that possibility as a piece of the budget solution.

"The nice thing about local taxes is they're decided by local elected officials, who can listen to their constituents and say what services are important to us? How do we deliver them? What are our priorities? And one of the groups that I intend to talk to over the next six weeks are the local elected officials. And they're going to come in and say don't cut me don't cut thee, cut that guy behind the tree. Well we've run out of trees," he said.

McElroy says fee increases won't be used as a back-door budget solution. But he says they will look at raising fees that don't currently reflect the actual cost of service. The new administration must submit its two-year budget proposal to the Legislature by mid-February.

McElroy's appointment leaves a vacant seat in the Minnesota House and will require a special election in his suburban Dakota County district.

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