Deficit debate is a central issue at State Capitol

Libby George

Since the 2003-04 legislative session convened Jan. 7, it’s been politics as usual in St. Paul – usual, that is, except for the $4.2 billion budget deficit and the rare combination of a Republican governor and a Republican House majority.

Budget battle

priority number one for the State Legislature: “Budget, budget, budget and budget,” said Rep. Phyllis Kahn, DFL-Minneapolis, who represents District 59B, which includes part of the University campus.

House Speaker Steve Sviggum, R-Kenyon, agreed with Kahn, saying the state’s budget woes would overshadow all other issues. He said for the most part the House supports Gov. Tim Pawlenty’s proposal for $468 million in cuts, which would both fix the $356 million deficit for fiscal year 2002-03 and provide $112 million for any unexpected dips through fiscal year 2003-04, which begins July 1.

“The governor’s recommendations are about as good as you can do with the end of the biennium approaching,” Sviggum said. “Generally speaking, the House is in there with the governor.”

The governor’s proposal would make $171 million in permanent spending cuts, with state agencies taking huge hits: a $44 million cut in operations expenditures and a $77 million cut in agency grants and programs. Higher education would also face $50 million in cuts.

Various social service programs could take major cuts, including ethanol subsidies aimed at helping farmers. The 21st Century Minerals Fund, which provides subsidies to the iron industry, faces $39 million in cuts. One-time reductions are possible for various other programs, such as the Supplemental Nutrition Program for Women, Infants and Children, which provides funding and education to low-income mothers and families. Pawlenty also cut $130 million reserved for transportation projects that will likely be funded by borrowing instead.

The Senate, however, is not as in sync with the governor’s plan. Friday the Senate Finance Committee passed its short-term budget proposal, which diverges from the governor’s plan in several ways.

“In general, we did keep with the governor’s framework,” said Assistant Majority Leader Ann Rest, DFL-New Hope. However, Rest added, “We were very concerned about the cuts to higher education.”

In fact, the Senate proposal would put $10 million back into the state’s grant program to help students secure financial aid for summer courses.

“The investments we’re going to make will be the ones Minnesotans say they value,” Rest said. “We retained contributions to the ethanol industry, which helps rural people. We also did not take away from the 21st Century Minerals Fund.”

Differing solutions

the $380 million in cuts made by the Senate – approximately $88 million less than the governor’s – do not sit well with many House Republicans.

“The Senate undersells,” Sviggum said. “Their reduction of about $380 million is inadequate – probably bordering on irresponsible.”

“Not everybody’s of the same mind as to what services we can live without and what we cannot,” Rest said, adding that split views between Democratic and Republican legislators would likely cause some friction. “I’m certain that there will be disagreements because I believe we bring different sets of values to the table.”

The main point of contention is taxes, which the Pawlenty administration has vowed not to raise.

“I think (tax increases) are for the Pawlenty administration to propose,” Rest said. “So far, it’s been only Republicans who proposed (tax increases), although they keep saying Democrats will do this.”

Sen. Dean Johnson, DFL-Willmar and chairman of the Senate Transportation Committee, proposed a bill that would increase the gas tax by six cents per gallon, which would produce $5.1 billion for transportation over the next decade.

The gas tax has been at 20 cents since 1988, and the increase has the support of many Republican legislators – including Sviggum and House Minority Leader Dick Day – but Pawlenty’s administration, which can veto the bill, provides a serious challenge for legislators.

“People who do not support a general tax think a gas tax is linked to integrity (of no tax increases),” Rest said.

Although some user fees, such as the gas tax or taxes on car licenses, will be necessary, Sviggum said, there are better ways to find the money, such as “a mega-honking bonding bill for roads, bridges and transit in the state.” Republicans have also proposed funding transportation projects by finding savings in cutbacks on road salt and street lights.

Rest, who sits on the Senate Transportation and Budget Policy Committee, disagrees with the proposal.

“I do think we’re beginning to seriously lag behind in our transportation and our transportation needs,” she said. “And if we are going to begin large-scale bargaining, it should be paid by users right now rather than future taxpayers.”

Rest added that the two-thirds majority in the Legislature required to override a veto from Pawlenty would never be attainable beause of Republican control in the House.

The second part of Pawlenty’s budget proposal is due Feb. 1, and House and Senate leaders have said they will approach their response to Pawlenty’s second proposal in the same way they handled the short-term proposal.

Republican agenda

in addition to differing on how to solve budget woes, Democrats and Republicans also differ on other key issues, which, due to the Republican administration and House majority, Democrats fear will be pushed quickly through the Legislature.

“Those bills will just zap right through the Legislature and get signed by the governor,” Kahn said.

Kahn predicts that Republicans will push conceal and carry weapons laws, abortion restrictions and specially marked driver’s licenses for immigrants.

Sviggum confirmed Kahn’s beliefs, saying Republicans have a responsibility to push their issues.

“We have been given the trust of the citizens in the state of Minnesota,” Sviggum said. “Without doing so, we would be undermining that trust and not following through with the campaigns.”

The issues for Republicans are outlined in the first five bills in the House: specially marked driver’s licenses for noncitizens, repeal of the profile of learning, tax-free zones in rural areas, an enormous transportation bonding bill and a new prescription drug plan. Kahn said she hopes the Democrats will provide some opposition.

“I’m certainly going to be voting against them,” Kahn said. “I hope the Democrats are going to stand up Ö that we keep the safety of the poorest people in society.”

Appointments and pledges

in addition to pitching budget proposals and transitioning into office, Pawlenty has also been busy filling positions in his Cabinet -most notably double-booking Lieutenant Gov. Carol Molnau as transportation commissioner, which has caused an unexpected reaction in the Legislature.

“Governor Pawlenty’s action in this shows how useless this position is,” Kahn said. “I don’t know why we’re putting money into a position whose primary job is to sit around and wait for the governor to die.”

Kahn introduced a bill last week that would abolish the office of lieutenant governor, saying that although estimations are difficult, it would likely save the state $2 million over a biennium. Her proposal has received support from other legislators, and if it passed, a statewide vote would occur in 2004, with the office abolished at the beginning of the next gubernatorial term in 2007.

Although Molnau faces challenges in transportation, other appointees are up against even tougher obstacles. Trade and Economic Development Commissioner Matt Kramer took office just one week after Blandin Paper announced the layoffs of 298 workers and amid forecasts that the Iron Range will suffer even more job losses if mineral subsidy cuts proposed by Pawlenty go through. Despite the cuts and a refusal to raise taxes, Pawlenty has pledged to help those left without jobs, which Kahn did not see as possible.

“We’ve got to talk about investment rather than spending,” Kahn said. “If you’re saying, ‘don’t cut spending,’ you’ve got to be willing to see some kind of tax increase.”

Libby George covers politics and welcomes comments at [email protected]