How to refill Minnesota's empty budget bowl?

DFL state legislators spend hours doodling with huge numbers.

Like this one: Minnesota's $4.8 billion budget deficit (not counting inflation) for the next biennium.

Subtract an across-the-board income tax surcharge from the deficit. Gain, maybe $2 billion. Deficit now $2.8 billion.

Rescind the two income tax cuts that came during the administration of Jesse Ventura. Subtract maybe $500 million from the deficit, which would be lowered to $2.3 billion.  

Add a fourth tier of 10.3 percent to the Minnesota tax code, hitting the states's rich — those making more than $1 million a year. (This would match California for the highest rate in the land for the wealthy). Add $600 million to general fund, reduce deficit to $1.7 billion.

Fiddle with the sales tax on high-end clothes and services. Build a casino at the airport. Increase fees, dramatically, for businesses using government services. Put a nickel increase on every cocktail sold in Minnesota. Cut private school aid for such items as transportation and textbooks.

Hope that some federal bailout money can be funneled into the general fund. Pray that all these nickels, dimes and quarters add up to $500 million. Deficit now $1.2 billion.

Keep doodling.

For years, for example, Rep. Frank Hornstein, DFL-Minneapolis, has believed the Met Council should be an elected body. This year, he will introduce a bill calling for Met Council commissioners to be replaced by county commissioners from the counties the Met Council serves.

"That way, we'll have an elected Met Council, but they'll already be paid by the counties,'' Hornstein said.

Savings to the state?

"Maybe a half million,'' said Hornstein, laughing. "But we'd have an elected Met Council.'' 

Legislative number-crunching for naught?
But after all of this adding and subtracting, erase all the doodles for two reasons:

1. Almost everyone at the state Capitol believes that when the new economic forecast numbers for the new biennium are released, either Feb. 27 or 28, the state's deficit will soar, perhaps to as high as $7 billion.

2. And maybe more importantly, Gov. Tim Pawlenty keeps saying he's going to balance the budget WITHOUT RAISING TAXES.

How do you doodle your way out of that? 

Pawlenty's expected to say it again on Thursday — "no new taxes'' — when he gives his State of the State Address to both bodies of the Minnesota Legislature.  

DFLers already are predicting  how Pawlenty's speech will go.

"There'll be a little bit of a sermon about how we all have to learn to do without,''  said Rep. Mindy Greiling, DFL-Roseville. "And he'll also talk about how we have to deal with the budget how families do. In hard times, they have to make hard choices.''

Rep. Alice Hausman, DFL-St. Paul, predicted he'll talk about "personal responsibility. And a lot of people who hear him will say, 'Oh, what a reasonable person our governor is.' He's good at it. I'd say he's getting as good as Ronald Reagan.''

Hornstein is certain that a section of Pawlenty's State of the State speech will deal with "looking at the budget deficit as an opportunity to reform government.''

Next week's budget address may offer more details
In other words, expect nothing of substance from the governor in his address. Perhaps, there'll be a bit more meat on the bones when he delivers a major budget address on Tuesday. But even in the budget address, there likely won't be a great deal of detail. 

Ultimately, DFL legislators believe, platitudes won't work. Pawlenty won't be able to talk Minnesota out of this mess. There are no one-time windfalls to turn to, such as the state's tobacco fund, which was used up a couple of years ago. The rainy day fund went away on a snowy day in December, when the governor used the last $155 million of that fund to pay for a portion of the state's $426 million hole in the current budget.

"There's no way Tim Pawlenty can get out of this with no new taxes,'' said Rep. Tom Rukavina, DFL-Virginia. "We have to raise taxes or he does serious damage — I mean serious damage — to the fabric of the society.''

Rukavina is an advocate of an across-the board surtax, which could, for example, be applied either to taxable income or tax liability.

"We're all in this together,'' he said. "A surcharge comes out of everybody's pocket.''

Greiling agrees that Pawlenty ultimately will have to somehow get out of the no-tax corner he's painted himself into. 

"There are going to have to be substantial cuts, substantial changes in how we do business around here AND there are going to be substantial increases in revenue (meaning tax increases),'' Greiling said.

But the DFLers also believe this is going to play like a giant poker hand.

"He's not going to show us what he's got until much later (in the session),'' predicted Sen. Dick Cohen, DFL-St. Paul.

In fact, most believe that this budget mess has multiple special sessions written all over it.

DFLers predict the machinations ahead
Hausman talked of how many in the Legislature see this going.

"There'll be a budget [passed by the Legislature]with tax increases and he'll veto it,'' said Hausman. "And not a single Republican will side with us (the DFL). The last time, there were six people who could give each other courage. (Six Republicans voted to override the governor's veto of a transportation bill, which included a gasoline tax increase,  in the last session.)  In this case, it would take three Republicans (to override a Pawlenty veto) and it's hard to see just three going out on a limb.''

So that likely means an extra session. Or extra sessions. 

To date, Pawlenty and most Republican legislators are claiming they believe they can hold K-12 education "harmless'' and still balance the budget with cuts. Given the fact that K-12 education is about half the state budget, that seems like an impossible dream.

The Health and Human Services category is the big apple the Republicans have in their eyes for cutting.  Local Government Aid  looks like a great big Republican target, too, even though the cities still are gasping from the $66 million dollar hit they took in December.

But even if you take a 20 percent hunk out of Health and Human Services, which would  put some Minnesotans out of nursing homes, and even if you all but eliminated LGA, which would take some cops off city streets, there'd still be a deep budget hole.

The political reality is Republicans can doodle with cuts as much as DFLers doodle with tax increases.  In the end, both cuts and taxes are going to be needed.

"We're going to be here a long time,'' said Greiling.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.