Pawlenty set to release two year budget plan
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After battling red ink for most of his first term, Gov. Pawlenty crafted this budget plan with some financial wiggle room. The latest economic forecast projected a $2 billion surplus. But Pawlenty made it clear in last week's State of the State address that he still wants a tight hold on the state purse strings.
"State government needs to live within its means," Pawlenty said. "We've just climbed out of an epic budget hole, and we're not going to spend our way back into one."
Pawlenty said state spending will grow automatically by about $1 billion. Add in the projected $2 billion surplus, and he says there's a more-than-sufficient 10 percent increase over the current budget. There's been a lot of talk about bipartisan cooperation at the Capitol this year, but DFL legislative leaders don't even agree with the governor on how much money there is to work with. They insist the projected budget surplus is much smaller when you adjust for inflation.
"People have to budget straight forward at home. We should do that here. And to pretend that we have money that we don't have is a concern," said DFL Senator Tarryl Clark of St. Cloud.
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Clark, who is the assistant majority leader in the Senate, said the state doesn't really have much extra money. She said lawmakers will still have to make tough choices on spending. Despite the disagreement over the surplus, Clark said she's looking forward to the governor's plan.
"I mean, he is the governor," she said. "We want to make sure that we're treating what he brings forward seriously. We do have some differences of opinion on priorities and how we can best get there."
Some of those differences will show up in education spending. The governor wants to increase the basic funding to schools, make high schools more rigorous, establish pre-school scholarships for needy children and provide funding bonuses for schools that score three stars of better on state report cards. Democrats want a bigger increase in basic funding along with a large investment in all-day kindergarten. DFL House Speaker Margaret Anderson Kelliher of Minneapolis said she expects some spirited discussion in the weeks ahead, especially on the issue of health care.
"But that's exactly what the Legislative process is for," she said. "Minnesotans I think are very clear on that they want to move towards covering more Minnesotans with health care. We think that the first way to start with that is covering more children. We think that the governor has signaled that he is at least interested in that. It's a different method, but we'll work that out in the Legislative process."
A showdown is also looming over taxes. DFL leaders want to provide property tax relief by increasing the state aid to cities counties and school districts. Gov. Pawlenty wants to cap local property taxes. Democrats have introduced bills that would raise the sales tax and gas tax. Pawlenty has threatened to veto tax increases. He warned lawmakers last week that government must stop paying for good intentions and start paying for better performance.
"I'll be much more likely to reach for the signing pen rather than the veto stamp if the bill on my desk clearly define expected results. It should have clear measurements for those results and link spending to performance, rather than just wishful thinking," he said. House and Senate committees will begin reviewing the governor's budget proposal this week. DFL leaders won't finalize their spending specifics until the release of the next state budget forecast in late February or early March.
