Surplus means money for some, but not for U

Sarah Hallonquist

The state should start shopping for a bigger piggy bank, but the University won’t get to tag along.
Gov. Arne Carlson unveiled a $592 million addition to the projected state budget surplus Friday, but the school’s funding requests aren’t likely to draw more attention.
Carlson’s February budget forecast paints a rosy picture of the state’s economy. With a total projected surplus of $1.9 billion, Carlson announced a proposal to return 80 percent of the new money to taxpayers.
Tax credits, property tax rebates and an income tax reduction account constitute the major portion of the expected additional surplus money. Twenty million dollars would be spent on improving state high school graduation standards, technology equipment for K-12 schools and affordable housing projects.
However, the governor’s proposal includes no provisions for padding the state’s higher education budget.
The University’s capital and supplemental requests are still working their way to conference committees, where House and Senate leaders will have to iron out agreeable bills. Legislators are uncertain whether the increased surplus will have an effect on the school’s funding bill.
“It’s a little bit early to get an accurate reading on that,” said Sen. LeRoy Stumpf, DFL-Thief River Falls.
But when the issue goes to conference committee sometime next week, he said it’s possible the University’s supplemental request could increase beyond the Senate’s version. The Senate approved $32 million of the University’s $41.5 million supplemental request. The House approved $38.5 million.
What could happen with the capital request in conference committee is still unclear because it has yet to pass the House’s final committee. Rep. Henry Kalis, DFL-Walters, chairman of the House Capital Investment Committee, said he is wary of spending more than what can be afforded.
At a press conference Friday, Carlson said he was concerned with capital funding cuts in the Legislature, especially in higher education projects.
“That kind of sends off a note to me that we’re going to have to do some serious bargaining,” Carlson said.
Carlson’s proposal for the University is $3 million more than what the school is requesting. Kalis said it’s unlikely that the money could be spent even if the governor’s proposal was approved, because the University would have to foot a third of their $249 million capital budget request.
Both Kalis and Stumpf have some ideas for what to do with the surplus money. Kalis recommends more spending on transportation projects, which have not received increases since 1991. Stumpf said he sees the surplus as a way to decrease the state’s debt instead of offering deep tax cuts.
Carlson proposed a 5 percent tax cut for the 2000-01 fiscal year. If approved, it would be the largest tax cut in state history.
Stumpf also said the extra money could allow the Legislature to pay for the entire capital bonding bill in cash, saving about $143 million in interest taxes and debt during the next few decades. Spending cash means less money would be appropriated for capital bonding, but would require some arm-twisting of the governor and House members.