Governor: Legislative session a 'keeper'

Gov. Tim Pawlenty wrapped up today's statewide fly around with a nearly 45 minute press conference in his St. Paul office. The governor praised the session's final product, likening it to the Governor's Fishing Opener earlier this month.

"It's the state capitol equivalent of catching a nice big walleye. It's a keeper," Pawlenty said. "This session is a good catch. It's a good catch, and it's going to result in a good result for the people of our state."

Pawlenty highlighted many of his legislative accomplishments during the session. They include:

- 3.9 percent cap on property tax increases;

- Direct property tax relief for 70,000 Minnesotans;

- Tax breaks for some veterans;

- 12,000 more people are eligible for health insurance, and

- More money is being spent on education.

Pawlenty also said he was pleased that lawmakers balanced the state's budget without raising taxes.

The budget deal closed a so-called loophole on corporations that operate overseas, cut $350 million in spending and used $500 million from the state's budget reserves.

With an eye towards the next legislative session, the governor reiterated his stance on holding the line on spending, making the state's schools more accountable and changing the state's tax code to be more business friendly. He also predicted that the state could face significant budget problems next session.

"You can't get overly locked in as to what's going to happen a year from now until you see those forecasts the economy. But clearly, we're going to have a significant budget problem in front of us. It's probably in the neighborhood of $500 million to north of a billion. We'll see," Pawlenty said.

Several lawmakers said they were pleased the session ended well and on time, but they worry they'll inherit plenty of red ink next session. They said the budget deal nearly emptied the state's reserves leaving them with little cushion for next year.

House Minority Leader Marty Seifert, R-Marhall, said the governor and lawmakers will have to make tough budget choices next session.

"This is an unbalanced budget after July 1, 2009. If we were in charge, we would have been more aggressive in reforming entitlement programs to make sure that we're structurally balanced after July 2009 after Arne Carlson often pointed to when he was governor. That you need to have structural balance not short term balancem," Seifert said.

The November election could determine next session's budget course.

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said her caucus is well placed for the election. She said DFLers delivered on their 2006 campaign promises to finish their work on time, increase funding for education and transportation, provide property tax relief and tackle health care costs.

Kelliher said she expects tough budget times next session, but she said that shouldn't take away from this session's work.

"We cannot just look ahead and say it looks rocky out there, and it looks like there are some boulders. We must stop doing everything. We must work harder to get things done," Kelliher said.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said one way to get things done would be to have veto-proof majorities in the Legislature. The Senate already has a super majority. The House is five votes short.

"If the Speaker and the Majority Leader of the House are able to add members, I believe the governor will continue to be in a compromising mood, and I believe we will do what's necessary to straighten out the fiscal situation in the state," Pogemiller.

When asked about Pogemiller's comments, Gov. Pawlenty said it was code word for tax increases. House Minority Leader Marty Seifert also said voters will have a choice between Democrats who want to increase taxes, and Republicans who are working to hold the line on spending.

It's likely that these types of exchanges will get more heated, and the recent warm feelings of a bipartisan budget agreement will wear off as the November election gets closer.

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