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Skirmish over taxes looms in budget battle
by Laura McCallum, Minnesota Public Radio
February 19, 2003

After the Senate State Government Budget Division gots its first look at the governor's budget, Sen. Jane Ranum huddled with GOP Senators Dave Knutson, Tom Neuville and Geoff Michel. (MPR Photo/Laura McCallum)

One day after the release of Gov. Pawlenty's budget, some people affected by the governor's proposed cuts are calling for tax increases. The governor and many Republican lawmakers say they're committed to balancing the budget without raising taxes. The debate over the state's level of taxes and spending is only beginning.

St. Paul, Minn. — Gov. Pawlenty's budget eliminates a projected $4.2 billion deficit without raising taxes. He cuts most areas of state government, spends down the state's tobacco endowments, raises some fees and freezes public sector wages for two years. Some of the people affected by spending cuts say it's time to put tax increases on the table.

"Raise my taxes! I said it," said Joann Roche, who teaches at Mesabi Range Community and Technical College in Virginia. The governor would cut higher education nine-percent from current spending levels. Roche says higher education is bearing a disproportionate share of the pain in the governor's budget. She says the cuts the governor is proposing would change the face of Minnesota.

"I honestly hope that before we go too far down this road of taking apart this state and the infrastructure that we have in place, which is the reason why most of us live here - God knows the weather isn't wonderful - if we're going to be Alabama and Mississippi, we might as well move there because it's warmer. I seriously hope that sombody is going to have the courage to say, this doesn't work the way we're doing it," she said.

Other voices calling for raising taxes include the Children's Defense Fund, Minnesota Council of Non-Profits and Citizens for Tax Justice.

The answer can't be they get to go around and beat up on our proposal and not put any of their own on the table. Where are their ideas? - Gov. Pawlenty

But DFL legislative leaders say they're not proposing a tax increase. Sen. Jane Ranum, DFL-Minneapolis, says she'd be willing to support one, but there's not much point in proposing it right now.

"At this point in time, the governor has made it very clear, and the House, which is where tax increases originate, have made it very clear, there are not going to be any tax increases. And the only thing he's opened the door for are, it appears, some very small fees," she said.

Ranum and other Democrats say Minnesotans need to examine the governor's budget proposal and voice their opinion. They plan dozens of town meetings around the state to get public comment on the governor's budget.

"We're not without our own marketing abilities and resources, and so I'm going to hit the road," promised Gov. Pawlenty. "You will see me criss-crossing the state in the next few weeks and month, and we will match them in terms of the marketing of their ideas versus ours. But the answer can't be they get to go around and beat up on our proposal and not put any of their own on the table. Where are their ideas?"

Senate DFL leaders say they will put forward a budget proposal, after they've had time to study the details of Pawlenty's plan. Some Democrats say that plan should include rolling back the property tax reforms of 2001, which cost about $1 billion a year.

Rep. Tom Rukavina, DFL-Virginia, wondered why most of his colleagues aren't willing to talk about reversing recent tax cuts.

"Everybody pussy-footed around over at that Democratic-Farmer-Labor press conference, and the fact of the matter is, why doesn't somebody say the truth around here? Let's go back to 1997 - actually, 1998 tax law - and there is no deficit in this state," he said.

Republican lawmakers say they won't revisit tax cuts, and they say public sentiment is on their side...

	'Raise my taxes!'

"There is a huge silent majority who don't want their taxes increased," says Sen. Tom Neuville, R-Northfield, who says the silent majority probably won't show up at town meetings. He says Democrats will mostly hear from public employees who don't like the pay freeze proposal. He says they need to hear from the private sector, which has experienced layoffs and cuts in pensions and wages.

"So the private sector has felt the pain already, and now people are saying we should put even more tax burden on them. That's hard to do," he said.

Neuville says the state should be able to live with a projected 6.6-percent increase in revenues in the next two years. That's a point Gov. Pawlenty will make again and again in the coming weeks, as the public debate over taxes gets louder.

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