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Pawlenty cuts hit education, social services, environment
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Finance commissioner Dan McElroy and Gov. Tim Pawlenty announce cuts in state spending. (MPR Photo/Tom Scheck)
Gov. Tim Pawlenty has used his emergency budget-cutting powers, after lawmakers failed to agree on a short-term budget fix. Pawlenty's cuts affect nearly every area of state government, from education to road projects to legislative TV. The governor says he had little choice, with less than five months left in the fiscal year.

St. Paul, Minn. — Gov. Pawlenty had given lawmakers a deadline of late Thursday night (2/6/03) to reach a budget deal. But early this morning, legislative leaders walked away from the negotiating table without an agreement. Pawlenty says he was forced to make immediate spending cuts to eliminate a projected $356 million deficit in the current fiscal year.

"We take no pleasure, we take no joy in doing this today, but the responsibility and the obligation becomes mine," he said. Pawlenty cut $50 million from higher education, half from the University of Minnesota and half from the MnSCU system. He cut another $27 million from K-12 education, although Pawlenty says he believes his cuts won't affect the classroom. He cut money for after-school programs, adult basic education and economic opportunity grants that help low-income Minnesotans.

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Image DFLers get the picture

The governor cut most of the ethanol subsidies for the rest of the year, and tapped most of the 21st Century Minerals Fund designed to create jobs on the Iron Range.

"We can't have $59 million in cash, in a cash treasure trove sitting around unused with for the most part no near-term real prospects for using that money when we've got a crisis otherwise swirling about us," Pawlenty said.

Pawlenty stressed the urgency of dealing with Minnesota's financial crisis. He says Moody's, one of the major bond-rating agencies, has put Minnesota on a credit watch, and is considering downgrading the state from its coveted triple-A bond rating.

Pawlenty says Moody's wants to make sure that the Minnesota Legislature is prepared to deal promptly with the next phase of budget-balancing. Next week, Pawlenty will release a budget for the next two years that must address a deficit 10 times as large as the immediate shortfall. He says the wrangling over budget cuts is only beginning.

"This is just the tip of the iceberg," he said. "It underscores, though, the dynamics within the Legislature and the difficulty if you think of kind of the geographic and political dynamics within the Legislature dealing with issues of the 21st Century Minerals Fund and ethanol and human services; it gets to be tough to put together a coalition."

Budget negotiations broke down Thursday night largely over the issue of permanent spending cuts. DFL Senate Majority Leader John Hottinger of St. Peter say Senate Democrats moved 95 percent of the way toward the House position.

But Hottinger says House Republicans wanted the Senate to accept permanent cuts without a full discussion of the impact of the cuts.

"It was a pretty fundamental disagreement. They wanted to do them quickly, and with little public input. We wanted to have the public engaged," Hottinger said.

House Republicans say they met several key DFL demands; they restored funding for health care programs for low-income children and immigrants. They also dropped proposals to allow the Pawlenty administration to require state workers to take unpaid leaves of absences, and to outsource some state functions to the private sector.

I have waited my whole life for the opportunity to quote Clint Eastwood: 'Go ahead, make my day.'
- Finance commissioner Dan McElroy

Republican House Speaker Steve Sviggum of Kenyon says he doesn't understand why the Senate didn't accept the final House offer. He says he thinks Majority Leader Hottinger wanted to compromise, but members of his caucus wouldn't let him.

"He is strangle-holded by people who are so far left that they are in complete denial of the problems that face Minnesota. Specifically, $4.5 billion deficits on top of the highest tax rates that this country has," Sviggum said.

Senate Democrats say they're prepared to make cuts in the next two-year budget, but they say the public should weigh in on them. They say there's no reason to make them now, when the governor's budget will be out next week. Pawlenty says he thinks some legislators wanted him to make the tough decisions in the first round of budget-balancing. He says that won't be the case starting next week.

"They've got to pass a bill before I can do anything with it; veto or sign it, so they've got a little more skin in the game in round two," Pawlenty said.

Pawlenty's finance commissioner says the governor will be forced to make deeper cuts in the budget he releases next week, because lawmakers couldn't agree on permanent spending cuts.

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