Bloomington, Minn. — Gov. Pawlenty's budget would cut nearly every area of state government, increase some fees, shift some spending to future dates and freeze public sector wages for two years. He also recommends spending down the state's tobacco endowments, valued at around $1 billion.
The governor says he stands by his campaign pledge to balance the budget without raising state taxes. He says Minnesota has one of the highest tax burdens in the country, and state government must learn to live within its means.
"I don't think it is unreasonable in times of war, in times of recession, in times of thousands and thousands of Minnesotans losing their jobs, in times of an enormous state budget deficit, to ask state government to live within a nearly 7-percent growth in revenues," he said.
Pawlenty says the problem is that state spending is projected to go up nearly 14 percent in the next two years. The biggest cost-driver is health care spending, something Pawlenty called "the public policy sumo wrestler in the room."
"It is consuming us at a rate and scope that we cannot sustain. And so changes need to be made," he said.
The governor's budget would actually increase spending on health and human services, but far less than the projected growth in demand for those services. He's recommending the elimination of General Assistance Medical Care, which provides health care for about 30,000 low-income adults who don't have children. They could then be eligible for the state's subsidized health insurance program, called MinnesotaCare, although the governor would reduce eligibility and increase premiums and co-pays for MinnesotaCare.
He's inflicting a lot of pain potentially on vulnerable Minnesotans. That's not the Minnesota I grew up with.
The deepest cuts in the governor's budget affect cities and counties. Aid to local governments would be cut by 22 percent. Finance Commissioner Dan McElroy, a former suburban mayor, says he's confident cities and counties will find ways to deliver services more efficiently.
"I'm reminded that Lamar Alexander said that every budget crisis should be seen as an opportunity to innovate, and we do not believe that the cities or counties should be spared that opportunity," McElroy said.
Cities and counties say they can't absorb the cuts, and they could result in local property tax hikes. The governor would also cut higher education by 9 percent and state agencies an average of 15percent.
The one area spared from cuts is K-12 funding for the classroom, which would actually get a slight increase in the governor's budget. Other education funding, such as after school enrichment grants and Adult Basic Education, would be cut.
DFL legislative leaders say they're concerned about the proposed cuts in local government aid and education. DFL House Minority Leader Matt Entenza of St. Paul says the cuts would shift costs to local property taxes. "When you see cops being laid off and firefighters being laid off, when you see property taxes going up by large amounts, when you see the governor's campaign promises being shredded, that doesn't look like good news."
Advocates for low-income Minnesotans say they bear a disproportionate share of the pain in the governor's proposed budget cuts.
Republican House Speaker Steve Sviggum of Kenyon says while people who rely on state services will complain about Pawlenty's budget, most taxpayers will appreciate it.
"It's very difficult to balance those who pay and pay for the system with those who use, or receive services from the system, because the former doesn't ask for a whole lot. So it's tough to cut from those who don't ask for a whole lot," Sviggum said.
Republicans and business groups say they applaud the governor for keeping his campaign pledge not to raise taxes. Democrats say they'll hold hearings around the state to let the public comment on Pawlenty's budget. Pawlenty says he expects to be attacked for his proposed cuts, and he challenged legislators who criticize them to put up their suggestions.