GOP leadership outlines ‘familiar’ plan to trim $1 billion from state’s projected deficit

Rep. Mary Liz Holberg and House Speaker Kurt Zellers outline the GOP plan for trimming $1 billion from the projected state deficit.
MinnPost photo by James Nord
Rep. Mary Liz Holberg and House Speaker Kurt Zellers outline the GOP plan for trimming $1 billion from the projected state deficit.

Former Gov. Tim Pawlenty’s budget-balancing strategy is carrying over into this session as the Republican legislative leadership today outlined plans to continue his spending cuts from last session as part of its plan to tackle the state’s projected $6.2 billion deficit.

Continuing those unallotments would reduce the deficit for the 2012-2013 biennium by about $840 million, leaders said.

Included in the bill is a provision asking Minnesota Management and Budget staff to identify $200 million in cuts to state agencies for the current budget cycle, effectively lowering the state’s projected budget deficit to $5.2 billion.

House Speaker Kurt Zellers, R-Maple Grove, called the plan (PDF) an “aggressive” first step, and Republicans lawmakers said they hope to pass the bill before Feb. 10.

The hardest-hit sectors under the proposal would be local governments and higher education, which would operate at current funding levels in the next biennium. That translates to $583 million in Local Government Aid and $185 million in higher ed cuts from projected spending levels.

“We’re going to look at every dime we spend, every dollar we spend at the Capitol,” Zellers said.

A freeze, not cuts, GOP says
Republican lawmakers stressed these reductions don’t represent real cuts but, rather, a continuation of current spending. They noted, for example, that their plan would keep appropriations for the University of Minnesota and the Minnesota State Colleges and University system at 2011 fiscal-year levels.

Rep. Bud Nornes, House Higher Education Committee chairman, said he doesn’t anticipate any negative consequences from preventing the automatic spending increases.

The Republican leadership said most people — especially in local governments — expected the move.

Also included in the bill is a provision canceling a tax credit program for political contributions, which would save an estimated $11.8 million.

It’s up to management and budget office to find the proposed $200 million in cut from state agency budgets, and Republicans are looking to Minnesota’s constitutional officers to trim their current budgets as well.

Rep. Mary Liz Holberg, House Ways and Means Committee chairwoman, likened the proposal to “taking a peek under the cushions” to find any extra money the state can use.

Holberg, R-Lakeville, admitted the $200 million figure is a soft target and that further discussion with the budget office will likely take place before a firm number is found. The bill would exempt special education, K-12 and higher education from further cuts during the current budget cycle — a move that limits the areas where the money can come from.

“I don’t think any of these are easy targets,” she said.

Even after the spending reductions, the state would face a $5.2 billion deficit. Holberg said it’s hard to “guesstimate” when the shortfall might be fully solved.

That means more painful cuts are in the works, and Senate Majority Leader Amy Koch today reiterated Republicans’ stout opposition to any tax increases.

Zellers said he informed Gov. Mark Dayton of the plan last week. Dayton is expected to release his own budget recommendation — which will likely include income tax hikes on the state’s highest earners — in mid-February.

But in a statement today, the govenor brushed aside the plan, saying:

“I will not agree to piecemeal cuts and partial solutions eliminating the $6.2 billion deficit in the next biennium.  I will propose a reasonable, balanced and complete budget solution on February 15th, and I ask the legislature to do the same thereafter, with citizen participation through hearings and very careful consideration of the effects of their decisions on people’s lives.”

DFL critical of ‘failed policies’
The DFL House caucus responded quickly, too, with Minority Leader Paul Thissen of Minneapolis saying that “all these Republican proposals do is keep us stuck in the failed policies and broken promises of the past.”

He said in a statement: “It’s only mid-January and the Republicans are already giving up on a permanent, long-term solution to our state’s perpetual red ink by continuing to play the same shell games to balance the budget. These policies will continue the squeeze on middle class families through higher tuition rates and higher property taxes.”

Thissen also accused Republicans of “breaking their campaign promises to hold harmless our school children, seniors and those who are disabled.” He said the GOP plan “permanently cuts transportation for disabled Minnesotans who need to get to doctors’ appointments or the grocery store … How many more promises will Republicans break when the other $3 billion in cuts are made?”

The Senate DFL caucus weighed in, too, with Minority Leader Tom Bakk  saying, “[I]t’s clear that an all-cuts budget is going to have a dramatic impact on Minnesota families.”

He said: “Our caucus will be taking a close look at the cuts proposed today by legislative Republican leaders, but will reserve final judgment until they put a complete budget solution on the table.  As of now, their plan would solve about one-sixth of the $6.2 billion deficit facing our state.”

James Nord, a University of Minnesota student, is a MinnPost intern.

Comments (7)

  1. Submitted by Sheila Ehrich on 01/18/2011 - 02:23 pm.

    Am I wrong, or didn’t Pawlenty already get rid of the refunds for political contributions? What are they talking about here?

    Also, are they intending that this should be to Dayton (for a veto) before his budget is even presented? Or just passed by the House by Feb. 10?

  2. Submitted by Neal Rovick on 01/18/2011 - 03:40 pm.

    Not quite how I would define “aggressive”.

    Continuing the “unallotments” and “peeking under the cushions” is a low water-mark in “aggressive”.

    Be brave, “man up” as was said so often in the recent elections, and come up with the full program.

    Or maybe it isn’t as easy you said it would be during the election season.

  3. Submitted by Kevin Watterson on 01/18/2011 - 04:54 pm.

    Sheila,

    Fmr. Governor Pawlenty did do away with the PCR program in his 2009 unallotments and the Legislature approved that elimination on a one-time basis last May. However, because it was one-time, the PCR is set to return starting July 1, 2011. We are proposing the one-time be turned into permanent. That is the case for all of the $841 million automatic increases. Hope that helps clear it up.

  4. Submitted by Patrick Steele on 01/18/2011 - 10:56 pm.

    Shouldn’t the Republicans in the Legislature propose $6.2 billion in cuts if they aren’t going to agree on (the undoubtedly forthcoming and desperately needed) tax increases? This is akin to a salesman showing off the fancy new car and explaining how the down payment is only about 16% of the total cost.

  5. Submitted by Glenn Taylor on 01/19/2011 - 08:09 am.

    The DFL House caucus responded quickly, too, with Minority Leader Paul Thissen of Minneapolis saying that “all these Republican proposals do is keep us stuck in the failed policies and broken promises of the past.”
    That’s right DFL spend more and move forward right into insolvency.

  6. Submitted by Kevin Watterson on 01/19/2011 - 10:58 am.

    Glenn,

    What’s amusing is that these “failed policies and broken promises of the past” were agreed to and voted for by the DFL last year, including Rep. Thissen.

    Patrick,

    We made it very clear this is only the first piece. More are coming.

  7. Submitted by Roger Smith on 01/19/2011 - 10:41 pm.

    What Thissen should have said is:

    “This is just more Tim Pawlenty-style budget gimmicks.” And left it at that. Invoking Pawlenty is more then enough to convey the image of poor and negligent management.

    And Kevin, as for more coming, it is pretty delicious to tell you that those bills, like this one, are–wait for it—

    Dead

    On

    Arrival.

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