State budget cuts could begin by the end of the week

Gov. Tim Pawlenty is poised to use his emergency authority to fix a $426 million shortfall in the current state budget.

State budget commissioner Tom Hanson met last week with the Legislative Advisory Commission to set the wheels of that fix in motion.

The first move is draining the state budget reserve of $155 million. Hanson told members of the House Finance Committee that the governor will soon begin cutting from unspent, available state funds under the process known as unallotment.

"Through consultations with with legislative leaders and legislators, as well as the LAC meeting, we have moved toward an unallotment strategy, probably within the next week or so. The governor feels it is necessary to move forward," said Hanson.

Hanson says a second phase of state cuts, totaling about $40 million, will come in January after state agency heads decide how to reduce their spending by 10 percent. Commissioners and higher education officials described to legislators how they plan to keep job vacancies unfilled, eliminate travel and squeeze more out their limited resources.

University of Minnesota President Bob Bruininks is trying to protect $50 million in unspent state funding. Bruininks says higher education institutions are still hurting from deep budget cuts in 2003.

"I know we need to do our part. This is a tough time. Your neighbor's barn goes down in a tornado, everybody has to come together and do something to help resolve and address these issues. But I guess I'm urging you to remember that the last time this happened in the state of Minnesota, MnSCU and the University of Minnesota led the hit parade," said Bruininks.

Education Commissioner Alice Seagren says she's looking for ways to reduce the day to day operating costs of her department, but not the K-12 programs it oversees. Seagren told legislators that Minnesota school districts will likely be spared from the short-term budget cuts.

"We are still going forward with analysis, because we know that we have a larger issue facing us. So like every agency, we're in the process of doing that analysis. But we have been told initially that the governor would like to protect education for this year," said Seagren.

DFL House Speaker Margaret Anderson Kelliher says she also wants to protect education from the short-term budget cuts. But she says that would mean bigger hits on other important areas, including higher education, health and human services and state aid to cities and counties.

Kelliher wouldn't provide any details, but she says the House will make its recommendations to Gov. Pawlenty in the coming days.

"I don't think it is going to be our job in this situation to tell an exact cut amount in the unallotment. But it's really to help weigh in on the priorities of how we would prefer, if we were passing a piece of legislation, to protect areas that are investments into the future for the state, or be able to minimize the cuts to those areas," said Kelliher.

House Democrats say they oppose a Senate DFL proposal that would solve the short-term deficit through an across the board spending cut of 1.6 percent.

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