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Senate approves first budget-fix bill
The Minnesota Senate has passed a short-term budget fix. The bill eliminates a projected $356 million deficit in the current fiscal year, and leaves a small financial cushion in case the state's revenues decline further. The bill relies more heavily on accounting shifts and makes fewer cuts than Gov. Tim Pawlenty's proposal.

St. Paul, Minn. — The Senate bill reduces state spending by $384 million. It uses one-time money, shifts some spending into the next fiscal year and cuts state agencies, programs and higher education.

The chair of the Senate Finance Committee, Sen. Richard Cohen, DFL-St. Paul, says the Senate met Gov. Pawlenty's challenge to act quickly to erase this year's deficit.

"Do you think I like carrying a bill that reduces appropriations, whether in reserve or elsewhere, for the University of Minnesota? You bet I don't. Unfortunately, in taking our oath of office on January 7, we don't have a choice," he said.

The Senate passed the bill on a 36-30 vote. Only one Republican, Dennis Frederickson of New Ulm, voted for it. Minority Leader Dick Day of Owatonna says Republicans aren't happy with the Senate bill. At $384 million, it's smaller than the governor's proposal of $468 million.

But Day says Republicans didn't attempt to change the bill because they don't want to be obstructionists. "We feel that the governor's package is best, but that being said, I think people in Minnesota want us to move as fast as we can, get this to the conference committee."

The Senate bill restores some of the spending cuts in Gov. Pawlenty's proposal. The Senate cuts the U of M and the MnSCU system $20 million each, compared to $25 million in the governor's plan. The governor wants to eliminate ethanol subsidies for the rest of the fiscal year, while the Senate bill funds all ethanol plants except Gopher State Ethanol in St. Paul.

The Senate doesn't tap an Iron Range development fund, while the governor uses $39 million from the account. The Senate bill requires counties to house felons serving less than a year in prison, rather than sending them to state prisons.

Sen. Dave Kleis, R-St. Cloud, says the change simply shifts the costs to counties. "Most of the county jails in Minnesota are full, or over capacity. Certainly we have a state problem in our correction facilities. But we don't solve the state problem in our correction facilities by making it a county problem."

Senate DFL leaders say they address that problem by creating a $21 million fund to reimburse counties for housing state prisoners.

The House is putting the finishing touches on its budget plan, but it will be much closer to the governor's proposal than to the Senate bill.

Republican House Speaker Steve Sviggum of Kenyon says the Senate plan is inadequate.

"It is loaded with gimmicks and shifts. We plan to tackle very forthright and very upfront the budget deficit we have, and not to gimmick and shift it away," according to Sviggum.

Sviggum says the House will make even deeper permanent spending cuts than Gov. Pawlenty proposed. Those cuts will help reduce a deficit in the next two-year budget that is projected to be about 10 times as large as the short-term deficit.

Senate Democrats say they didn't want to rush to pass permanent spending cuts without having more public input on the impact of the cuts. Majority Leader John Hottinger of St. Peter says the Senate plan is responsible.

"We don't make cuts in the dark of the night for '04-'05. We urge that that discussion be held in public," Hottinger said.

The House will vote on its plan early next week, and then the two bodies will work to reconcile the bills. Speaker Sviggum says it won't be easy, because they will probably be about $100 million apart.

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