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Pawlenty issues deadline for short-term budget fix
by Tom Scheck, Minnesota Public Radio
January 21, 2003

Gov. Tim Pawlenty continues to push legislators for quick action on the short-term budget deficit. Tuesday he sent a letter to lawmakers telling them he'll cut spending on his own if they don't pass a budget balancing plan for this fiscal year by early February. Lawmakers need to erase a $356 million deficit in the fiscal year that ends in June. The DFL-controlled Senate is poised to vote on its budget bill on Thursday. Several House Committees took votes on critical issues Tuesday, including cuts to health programs and restoring ethanol subsidies.

St. Paul, Minn. — When the House Health and Human Services Finance Committee finished making cuts, it had gone beyond what Governor Pawlenty had proposed. Pawlenty suggested $39 million in cuts to health and human services programs. The committee came up with another $7 million in cuts.

Rep. Fran Bradley, R-Rochester said House Republicans went higher because health and human services is one of the largest portions of the budget. He also said lawmakers want to find money to restore cuts that Pawlenty proposed to the state's ethanol subsidies.

"That is a $7 billion biennial budget delivering what amounts to $38 million or $39 million is pretty light. Secondly and I think it's no surpise to anybody the ethanol proposal, for example, put a lot of pressure. There's a lot of interest in our caucus to relieve some of that pressure, " he said.

Bradley's proposal would end welfare grants to non-citizens. It would also create stricter eligibility requirements for state child care subsidies. It would repeal the state's Cover All Kids program, which provides free health care for low income children. Bradley said children in that program would be eligible for health insurance through the MinnesotaCare insurance program.

Jim Koppel, with the Children's Defense Fund, disagreed. He said thousands of children would lose coverage if the Cover All Kids program is cut. He said MinnesotaCare doesn't enroll children if a parent's employer offers health insurance.

"The end result is you will lose kids when you move from medical assitance to MinnesotaCare. When you repeal Cover All Kids you're not just shifting the costs. You are going to lose coverage for children. We will have fewer children insured," he said.

Meanwhile, Gov. Tim Pawlenty wrote a letter to lawmakers saying he'll start cutting spending on his own if lawmakers don't pass a budget balancing plan by the first week of February. He also reminded lawmakers that he wants to see permanent cuts to the budget. He said permanent cuts now will help with the state's larger budget deficit in the next budget cycle.

Pawlenty spokeswoman Leslie Kupchella said the governor is concerned about a Senate DFL plan because it relies more heavily on one-time accounting shifts.

"The proposal that he has laid out has, I believe, one shift there. They've got $55 million worth of shifts. That's an awful lot. Again, he wants to just focus on the kind of plan that he has recommended that shares some of the pain across a number of different agencies," she said.

Kupchella said the Senate plan also doesn't leave enough of a cushion in case of an economic dip. Pawlenty's plan has a $136 million cushion.

Assistant DFL Senate Majority Leader Ann Rest says their proposed $28 million reserve is adequate.

"We should concentrate this bill on '03 and then have a very deliberate thoughtful discussion with one another, with the governor, and with the public about the impact of proposals that make long term changes in service cuts," Rest said.

Pawlenty's letter to lawmakers also said they shouldn't protect subsidies for profitable businesses. Those comments were clearly aimed at concern over his proposal to cut ethanol subsidies. Pawlenty proposed cutting the remaining $27 million from the program in the current fiscal year.

Senate DFLers want to restore nearly all of the funding.

The House Agricultural and Rural Development Finance Committee also voted to restore $21 million for the program. Rep. Elaine Harder, R-Jackson, said she's pleased they've restored some of the cuts. But she said she can't promise deeper cuts won't be made in the future.

"Unfortunately, this comes without any promises except that we'll be engaged in the same difficult deficit resolution kind of measures that we just are trying to come to grips with now. That's about the extent of the promises," she said.

Several DFLers voted against the plan because it didn't restore the entire subsidies. Others worry the money earmarked to fund ethanol will be taken from an Iron Range development fund.

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