[Winona Online Democracy] Hello All,
If you have a chance to read far enough back in the Star Tribune, some good stories appear about the budget. Here is the paper's editorial and a story from two days ago. The two pieces point out important parts of this budget puzzle. One of the most interesting sections that the second article points out is, "This is the largest budget in state history," he [Pawlenty] said, noting that a number of the rollbacks are not actual cuts, but reductions in projected growth. However, almost every biennial budget for the past two decades was at the time the largest ever. And Pawlenty's proposal provides the smallest increase in at least 20 years, barely enough to account for population increase and inflation." Not to mention the shell game when the Governor talks about more money for schools. The State took over a bigger chunck of the school funding two years ago, it's not more money, it's just coming from the state instead of the local levels. Such the political spin goes. I hope the media does a lot more of this. I'm not saying the sky is falling but I'm not too chicken to get involved in the political discussion about the realities of these huge changes in our quality of life. F.Y.I. Dwayne ================ Star Tribune Editorial: Pawlenty budget / The pain isn't widely shared Published Feb. 19, 2003 ================= After telling Minnesotans for weeks that he was grappling with the Incredible Hulk of state budget deficits, Gov. Tim Pawlenty produced a surprise Tuesday for some Minnesotans: no pain. If you're a middle-or upper-income earner, living in a city that receives little state aid (that would be a suburb), not sending a child to a public college, not much of transit or state parks user -- then Pawlenty has a deal for you. His budget would let you skate through the state's deficit valley pretty much unscathed. Unless, of course, you happen to be a public employee. Then the governor wants you to forgo a wage increase for two years (which, depending on your age, could be a hit that keeps on hitting you in retirement). Better not lose your health insurance. Eligibility for MinnesotaCare would shrink under Pawlenty's plan. Better start saving now if you expect your kids to go to the University of Minnesota or a MnSCU school. The governor's plan keeps tuition climbing fast. Pawlenty has cleverly concentrated his budget-balancing plan's impact into three categories -- public employee compensation, higher education and state-supported health care and human services -- and two geographic zones, outstate Minnesota and the core cities. He asks those sectors to do much of the heavy lifting that's required to plug a forecasted $4.5 billion hole in the state's fiscal 2004-05 budget. Does that square with Minnesota's standard of fairness? That is the question that will dominate the balance of the 2003 legislative session. The answer should be informed by history -- some of which Pawlenty selectively cited yesterday. He noted that the state's budget trouble was triggered by the burst of an economic bubble that looked deceptively solid four years ago. He acknowledged that, as a legislator, he was among those who thought prosperity would last, and based a permanent tax cut on that presumption. The presumption proved wrong. But the governor rejects any suggestion that those tax cuts were misguided. Rather, having sold tax cuts on a claim that they could be made without cutting services, Pawlenty now argues that public services should be made to match downsized revenues -- and that the squeeze should largely spare the Minnesotans who gained the most from the tax cuts. Previous generations facing similar challenges have made different judgments about fairness. In 1933, when states all around Minnesota were opting for regressive sales taxes, Gov. Floyd B. Olson led Minnesota to enact an income tax based on ability to pay. In 1982, after cutting spending, the state imposed a temporary income-tax surcharge so that middle-and upper-income Minnesotans contributed to the solution. Pawlenty's budget has a number of strengths. It includes several creative administrative consolidations and inducements for efficiency. It strives to adequately fund student financial aid and discourage teacher layoffs. It takes pains to spare any city from double-digit revenue cuts in any given year. It wisely reestablishes the state's drained $500 million reserve fund. Those are things that legislators ought to value in a budget plan -- but so is fairness. Minnesota government is not of, by and for public employees or the poor. It belongs to every Minnesotan, and making it fiscally sound again is every Minnesotan's task. ================= Star Tribune Article: "Pawlenty spreads pain to cut deficit" Patricia Lopez and Dane Smith Published Feb. 19, 2003 ========================== City governments would lose about a fourth of their state funding, and counties nearly as much. Wages would be frozen for two years for more than 300,000 public employees. Colleges and universities would see unprecedented funding reductions. And access to subsidized health care would be reduced for thousands of Minnesotans. Those are the major elements of a proposal that Gov. Tim Pawlenty announced Tuesday to wipe out a $4.2 billion projected deficit during the next two years, without raising taxes. Pawlenty described the moment as a pivotal point in Minnesota history, borrowing a phrase from President John Kennedy and saying Minnesota "faces a New Frontier" of competitive pressures and a slower-growing government. But that likely means that bus fares would go up and service would go down. Camping fees for state parks would rise, and half of the convicts at state prisons in Stillwater and St. Cloud would double-bunk. The state's health care plan for low-income childless adults would disappear. The Pawlenty proposal, which now begins its journey through the legislative process, would protect K-12 classrooms and give schools an increase of about $300 million over two years. Aside from schools and overall spending on health and human services, however, most every other part of stategovernment would experience double-digit-percentage reductions in their budgets. Transportation would see a general fund cut of 64 percent, though a lot of that reduction is related to a previous one-time infusion of cash to move some road projects ahead. Much of transportation's funding comes from other sources, including the federal government. Even so, its overall funding would drop 11 percent. Every state agency would see a 15 percent drop. Pawlenty, who called the state's fiscal crisis "a brain-buster" that has him worried from the moment he wakes up, said the proposals "will impact many Minnesotans, including me." Reaction to the Republican governor's plan varied wildly, from enthusiastic embraces by business leaders and conservative interest groups to harsh denunciations from affected agencies, DFL legislative leaders and liberal interest groups. In an unusually sharp response from the judicial branch, Supreme Court Chief Justice Kathleen Blatz said in a statement Tuesday night that proposed cuts to the courts might necessitate the layoff of 800 employees and compromise fair and speedy trials. "This is unacceptable," she said. In his presentation, Pawlenty took great pains to note that as tough as parts of his budget might appear, the overall proposal actually would increase spending by $1 billion over two years -- a 3.8 percent rise from the current two-year budget period to the 2004-05 fiscal years. ========== "This is the largest budget in state history," he said, noting that a number of the rollbacks are not actual cuts, but reductions in projected growth. However, almost every biennial budget for the past two decades was at the time the largest ever. And Pawlenty's proposal provides the smallest increase in at least 20 years, barely enough to account for population increase and inflation. =========== Projected spending before the Pawlenty proposal, based on programs in current law, had been estimated at about $5 billion more for the next budget period. These projected increases were driven by factors ranging from more kids in schools to rising health care costs to the basic increases in wages and benefits that are negotiated routinely. =========== Those spending demands were easy to accommodate during the revenue surpluses and economic boom of the 1990s, which Pawlenty called a "mirage." But now, he said, "the math doesn't work." In previous downturns, governors in all parties typically have used tax increases as part of the solution. But Pawlenty, who sold himself to his party as a strong conservative, pledged no increase in taxes. DFLers bearish DFL legislative leaders panned the proposal as bad for Minnesota's quality of life and a violation of Pawlenty's promise not to raise taxes, namely local governments' property taxes. They also promoted their plans for a statewide series of hearings on the budget and encouraged affected citizens to show up and speak out. However, DFLers so far have avoided advancing even a sketchy plan for their own budget-balancing, and they refuse to say whether or which tax increases they might support as an alternative to cuts. Pawlenty and Republicans, in turn, have chided DFLers for complaining without offering alternatives. "Republicans want to turn their back on the Minnesota Miracle [tax increases in the 1970s that lowered property taxes and equalized revenues for local governments and schools]," said Senate Assistant Majority Leader Ann Rest, DFL-New Hope. "[These are] the very things that made us number one in liveability." House Minority Leader Matt Entenza, DFL-St. Paul, said the budget proposal amounts to at least three broken campaign promises by Republicans and Pawlenty. "He said he wouldn't raise taxes, and there's a mammoth increase in property taxes. He said he'd protect public safety, and cops and firefighters will be cut. He said they'd protect the elderly in nursing homes, and they are cutting nursing homes," Entenza said. Finance Commissioner Dan McElroy and Pawlenty insisted that a combination of levy limits and other spending disincentives they are proposing for local governments would at least prevent large property tax increases. Pawlenty said Minnesota's economy had been in a downturn for two years and that cities and counties had yet to suffer aid cuts. "They haven't had one fiscal hair on their heads touched," he said. Republicans bullish Pawlenty's Republican allies in the Legislature, who balked at his cuts in ethanol subsidies when Pawlenty earlier this month tried to pare spending in the current budget period, forcefully embraced his plan. "House Republicans and the governor recognize that Joe and Jane Minnesota are asking us to balance this budget without raising taxes," said House Majority Leader Erik Paulsen, R-Eden Prairie. "DFLers are eyeing Minnesotans as Joe Millionaire," he added, referring to DFL criticism of the tax cuts and the advocacy by DFL interest groups for tax increases. Some Republican leaders privately acknowledged that there might be serious complaints from their members about the cuts in city and county aids, especially in rural areas that depend on those subsidies far more heavily than suburban communities. Pawlenty's plan manages to avoid closing any outstate college campuses or shutting down any other major institutions in rural Minnesota, noted state Rep. Jim Knoblach, R-St. Cloud, chairman of the Ways and Means Committee. Many Republicans expressed relief that the proposal seemed less severe than it might have been. ?It's better than we all expected by far. I'm very optimistic. I think it can be done," said Senate Minority Leader Dick Day, R-Owatonna. No turning back Pawlenty on Tuesday again made the case that despite its economic travails -- indeed, because of them -- Minnesota could not turn to tax increases. "The overwhelming majority of Minnesotans agree with me on that position," he said. He noted that even if his budget were adopted wholesale, Minnesota would remain "one of the highest-taxed, highest-spending states in the nation." About two-thirds of Pawlenty's budget solution would come from reductions in projected spending -- about $2.9 billion. The rest comes from accounting shifts and use of off-budget special funds, such as the state's $1 billion endowment created from its settlement with tobacco companies. Use of accounting shifts is considered poor fiscal practice, and the Pawlenty budget has upward of $600 million in such shifts, according to Senate Finance Chairman Dick Cohen, DFL-St. Paul. McElroy acknowledged that it is not a preferred method. "This budget wouldn't get an A-plus from Moody's," he said, referring to one of the major New York bond houses. "But I think it would get a fairly good grade." Pawlenty emphasized that his plan also would begin to rebuild the state's depleted budget reserves to $500 million by the end of the budget period -- crucial for maintaining the state's AAA bond rating. Neither Pawlenty nor McElroy could offer any estimate of the total effect of the public sector wage freeze, but the budget proposal presumes two years of no-growth salaries. Without that, McElroy warned, "there will be greater impacts on children and on services." -- The writers are at [EMAIL PROTECTED] and [EMAIL PROTECTED] ------------ Dwayne Voegeli Winona County Commissioner, District #2 (507) 453-9012 [EMAIL PROTECTED] 870 44th Ave. Winona, MN 55987 ------------ _______________________________________________ This message was posted to Winona Online Democracy All messages must be signed by the senders actual name. 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