Gov. Tim Pawlenty issued a final warning to the Legislative Advisory Commission on Wednesday morning: Come up with a budget compromise by the end of Thursday or the governor will draw one up himself.

The meeting – headed by Department of Finance Commissioner Dan McElroy – was called to consult legislators on how to balance Minnesota’s 2003 budget. If legislators do not agree on cuts, Pawlenty can decide where to make them on his own by using a process called “unallotment.”

“We cannot spend much more time and energy chasing a mosquito around the room when you’ve got a tyrannosaurus rex in the room,” Pawlenty said, referring to the deficit for fiscal year 2004-05. “Every day that goes by, more time and money goes out the door.”

Greater cuts

Although Pawlenty joked with legislators, the possibility of unallotment carries serious ramifications. In addition to the huge cuts already made in House and Senate plans, Pawlenty would have to cut even more.

“The total we have to find is $332 million,” McElroy said. “If you take off the things we can’t do Ö the range we would have to look elsewhere is $60 (million) to $100 million.”

McElroy said that without legislative action, Pawlenty cannot use money that is currently factored into the budget proposal – such as money from bonding programs, the airport fund and the Workers’ Compensation Fund.

This would not bode well for the University or several other state programs and social services.

Rep. Jim Knoblach, R-St. Cloud, and co-chairman of the conference committee formed Tuesday to resolve differences between the House and Senate budgets, has previously said the additional money would likely mean additional cuts to the University and social services.

McElroy said cuts would be made from the 21st Century Minerals Fund, compensatory aid and K-12 aid, but an itemized list of cuts would not come unless Pawlenty actually unallots.

“I don’t expect the governor to release a list before he has to pull the trigger,” he said.

Although McElroy said these programs were important to the state, he said they “don’t rise to the importance of the requirement to balance the budget.”

Minnesota’s constitution mandates that the state operate on a balanced budget.

Ultimatums

Pawlenty made no apologies for the fact that he will make the budget cuts himself if necessary, but he implored legislators to take action in order to efficiently prepare for the next fiscal year.

“We are required by law to use that reserve,” McElroy said of the $24 million reserve in the current fiscal year. He added that, under law, in the case of unallotment a budget reserve cannot be created.

“There is a substantial risk that the deficit in 2003 will get worse,” Pawlenty said. “We need to have a significant cushion on the bottom line.”

Pawlenty also said the Legislature needs to make permanent spending cuts and face the reality of the deficit.

“We got into this situation by hoping things would get brighter,” Pawlenty said. “Now we have to pay the bills.”

Trading blame

House and Senate leaders used the meeting to publicly call each other out on the failure to come to a compromise between the respective $468.2 million and $384 million plans in the House and Senate.

“We are waiting for the Senate to respond,” said Speaker of the House Steve Sviggum, R-Kenyon. “The Senate gave us an initial proposal and we responded.”

Sviggum said that the Senate issued a seven-page proposal Friday and that House leaders had responded – both verbally and in writing – that permanent reductions to spending are absolutely essential.

Knoblach said the House demanded the Senate make $400 million in structural cuts for the next fiscal year and $171 in cuts for this year.

“We have not heard from (the Senate) in five days,” Sviggum said. He called the response “a very reasonable response to a very prudent offer.”

Senate leaders said they are not stalling and that the House simply needs to negotiate.

“We gave them a seven-page proposal,” said Sen. John Hottinger, DFL-St. Peter, co-chairman of the conference committee. “We’re the ones who want to have public meetings. We have made detailed progress Ö and we want to get it done.”

Sviggum said the House will not give in to the Senate plan because the governor is in line with its proposals.

“We think the Senate will make significant movement or the governor will unallot,” Sviggum said.

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