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Pawlenty urges Republicans to stand tough on budget
by Laura McCallum, Minnesota Public Radio
May 7, 2003

Gov. Pawlenty gave Republican legislators a pep talk Wednesday, urging them to stand fast to their pledge not to raise taxes to solve the state's deficit. (MPR Photo/Laura McCallum)

Gov. Tim Pawlenty is telling House and Senate Republicans to hold the line on taxes. Pawlenty delivered a pep talk to Republican lawmakers Wednesday, urging them to stick to their principles and reject DFL attempts to raise taxes. DFL leaders say Pawlenty's words make it tougher to find middle ground in the final days of the session.

St. Paul, Minn. — Gov. Pawlenty says the Legislature is at a crossroads, with the House and Senate about $1 billion apart on budget bills. He told Republicans that they're in a difficult position -- they're hearing from people who would be affected by proposed budget cuts. But the governor says Republicans didn't run for office to raise Minnesota taxes, and he urged them to avoid a tax increase.

"Keep the faith, stand on principle, and know what works," Pawlenty says. "What doesn't work is raising taxes in one of the highest-taxed states in the nation that is hemorrhaging jobs."

Pawlenty says raising taxes when the state faces a deficit of more than $4 billion will further stifle economic growth.

"There aren't many thinking economists in the country who would say when you've got a war, when you've got a recession, when you've got mass layoffs, when you've got economic stagnation, a good idea is to raise taxes," Pawlenty says.

I don't think you can claim that government's gotten out of hand in this state. - Economist Art Rolnick

"I think it's the governor that needs to sit down and listen to his Council of Economic Advisors," says Sen. Jane Ranum, DFL-Minneapolis.

Ranum says two prominent economists who advise the state on fiscal matters haven't discounted tax increases as part of a budget solution. She asked economists Art Rolnick and Paul Anton to testify before a joint meeting of two Senate budget committees.

As Pawlenty was telling Republicans that Minnesota needs to get government spending under control, Rolnick was disputing that notion in the Senate. He says state taxes as a percentage of gross state product have dropped from 8 percent in the early 1980s to the current 6.2 percent.

"I don't think you can claim that government's gotten out of hand in this state ... and again, when I see these numbers, it suggests that at least over a very successful period, we're at the low end of the size of government," Rolnick says.

Two former state finance commissioners who dealt with deficits also told senators that avoiding a tax increase now could cause a bigger hike later. Sen. Ranum says Pawlenty should heed their advice.

"I think he really needs to sit down and listen to people who have been through this, because he has boxed himself in," Ranum says. "And I'm afraid he's more interested in his own political future instead of the long-term economic health of the state of Minnesota."

DFL leaders say Pawlenty is unwilling to budge from the no-tax-increase pledge, sponsored by the Minnesota Taxpayers League, he made during the campaign. Pawlenty told Republican lawmakers that he signed the pledge because he believes it.

"And so people say, you know, you've taken this pledge, you've handcuffed yourself, but for the fact that you took the pledge to get the Republican endorsement, we wouldn't be in this predicament -- that is a bunch of hooey!" Pawlenty told the Republican lawmakers.

Pawlenty disputed the findings of recent polls showing that about three-fourths of respondents would support tax increases on cigarettes and upper-income earners. He says the polls point out the potential consequences of budget cuts, but don't say that a tax increase is a "job killer."

DFL Senate Majority Leader John Hottinger says Pawlenty is drawing a line in the sand, which won't help budget negotiations.

"We have been saying we're willing to work hard with the governor to find a middle ground that's consistent with what the people of Minnesota want. That message sounds like an extreme ground, inconsistent with what Minnesotans want," says Hottinger.

Hottinger has been talking to Pawlenty's chief of staff and House leaders, but says there hasn't been any movement from Republicans. Pawlenty says he's still hopeful the House and Senate can bridge their differences, and avoid a special session.

"It seems to me -- and I met with legislative leaders again yesterday -- that everybody is sincerely interested in getting this thing wrapped up by May 19, but we gotta put a move on it because the days are counting down," says Pawlenty.

Pawlenty says he hasn't ruled out a special session if lawmakers can't reach agreement by the May 19 deadline. But he says he hasn't decided when he'd call it if it becomes necessary.

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