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Revised budget contains more fees, cuts, shifts
by Laura McCallum, Minnesota Public Radio
March 12, 2003

Gov. Tim Pawlenty has released his recommendations for plugging a $125 million hole in the budget proposal he announced last month. He's proposing a combination of accounting shifts, spending cuts and fee increases. His finance commissioner says he doesn't think the changes are terribly controversial, but the groups getting cut disagree.

St. Paul, Minn. — Gov. Pawlenty had to revise his budget proposal for dealing with a projected $4.2 billion deficit, in light of the state's latest revenue forecast.

Finance commissioner Dan McElroy says the budget revisions are consistent with the governor's pledge not to raise taxes to balance the budget.

"Those states we compete with for good-paying jobs continue to be committed to solving their budget challenge without taxes, particularly Wisconsin and Michigan. We think the people of Minnesota have spoken pretty loudly through the polls and in the last election, that they believe we can bring Minnesota's spending in line with its means without raising their taxes," he said.

McElroy says the governor's revisions rely more heavily on accounting shifts than he'd prefer. More than half of Pawlenty's proposal consists of payment shifts, such as asking businesses to bump up the date they send sales tax collections to the state.

The governor also recommends deeper cuts to the state Arts Board and public broadcasting. He would reduce payments to HMOs for treating people in the MinnesotaCare subsidized health insurance program. Pawlenty would also eliminate a state program that provides a subsidy for a parent to stay home for up to a year to take care of an infant.

McElroy says it's getting harder to find places to cut in the state budget. "I don't like cutting the arts again, because it is good for Minnesota. But it's hard to say that it has the same impact as cuts in human services or health or education. That is perhaps the one I thought longest about."

Arts organizations say they expect to face cuts, like nearly every other area of the state budget. But the executive director of the state Arts Board, Robert Booker, says he didn't expect the governor to propose cutting the board's funding by 40 percent from current spending levels.

"I think one of our former leaders said without the arts we'd be a cold Des Moines. With a cut like 40 percent, I don't know that we can even make that standard," Booker said.

Booker says a thousand arts supporters came to the Capitol a couple of weeks ago to urge lawmakers to limit arts cuts to 14 percent. That's the size of the deficit as a percentage of the state budget.

Gov. Pawlenty also wants to reduce public subsidies paid to political parties and candidates by about half, and cut in half the state refund for campaign contributors, from $50 to $25.

"It would definitely be a big damage to the campaign finance system," said Sen. John Marty, DFL-Roseville, who wrote many of the state's campaign finance laws. He says the governor's proposal would increase the influence of big money in politics.

"The guys who give $2,000 to a campaign, the lobbyists, the PACS, it's not going to have any impact on them. It's going to have an impact on the senior citizen who makes a $50 contribution or a $25 contribution, it's going to have an impact on them," he said.

Finance commissioner McElroy defends the proposed campaign finance changes. He says many states don't even offer a state refund of political contributions.

"We thought that political campaigns should have some of the burden as well as businesspeople and individuals needing human services and a variety of others. We stand by this recommendation, we think it was the right thing to do."

McElroy says the governor's budget is now in its final form. Gov. Pawlenty has called on legislative leaders to begin moving budget legislation. House Republicans say they support the governor's budget, but will make some adjustments.

Senate DFL leaders say as they put together their budget plan, they want to avoid shifting costs to college students and local governments.

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