Pawlenty's no-new-taxes philosophy under scrutiny

A no-new-taxes philosophy guided Tim Pawlenty's budget approach as Minnesota governor. Accounting tricks, a well-timed infusion of stimulus money from Washington and word games kept the Republican mostly on that course.

The newly minted presidential candidate hopes Republican primary voters will see him as an economic pro accustomed to dealing with red ink and capable of confronting the nation's colossal fiscal problems.

"Minnesota's big-government legacy presented me with the same type of problems Barack Obama found in the nation's capital," Pawlenty said this week of the Democratic president he hopes to unseat. "But my approach - and my results - were very different from his."

He planned to press the theme Wednesday in a Washington speech at the libertarian Cato Institute, an appearance that's part of a weeklong series of events timed around his announcement this week of a presidential candidacy.

On the campaign trail, the Republican eagerly highlights his tall pile of tax-increase vetoes. And he boasts of enduring a partial government shutdown as well as a workers' strike to contain costs.

But his record also carries vulnerabilities for foes to exploit.

There's the carefully crafted "health impact fee" on cigarettes. It's a euphemism for a tax increase in the eyes of some allies and most opponents.

Minnesota lurched from one deficit to another under his eight-year tenure. The state's books technically balanced when he left office in January, but by then a mammoth deficit was forecast for the first budget his successor would need to craft.

Pawlenty distances himself from that projected $5 billion shortfall, but it's partly attributable to temporary fixes he either proposed or consented to. Schools are owed more than $1.4 billion in state IOUs, one-time stimulus dollars used to prop up ongoing state expenses are drying up and short-lived spending curbs Pawlenty first enacted using his executive powers are expiring.

His defenders, such as former Republican House Speaker Steve Sviggum, say Pawlenty had to work within the confines of a politically split state government and wanted to be more aggressive than Democrats in the Legislature would permit.

"It took some patchwork, no doubt," Sviggum said. "But the fact is, we were able to meet the constitutional charge of balancing the budget without raising taxes."

Taxes did rise in the Pawlenty era, although his fingerprints aren't on them.

His veto of a gas tax increase was overridden and voters raised the sales tax through a ballot measure. Property taxes shot up in the Pawlenty years, mostly those enacted by city, county or school governments as they coped with stagnant or falling state aid. The year he entered the governor's office, Minnesota land owners paid about $5.1 billion in property taxes; the total take topped $8 billion when he departed.

"Tim Pawlenty consistently passed the buck - onto local governments, onto the Legislature, onto anyone he could," said state Rep. Paul Thissen, the top House Democrat. "His budgets were filled with shifts, tricks and gimmicks that created perpetual state deficits and set Minnesota behind the rest of the nation."

Then there are fees.

The state slapped higher surcharges on everything from speeding tickets to marriage licenses. None was more controversial than the 75 cent-per-pack levy on cigarettes, which helped break the stalemate that pushed Minnesota to a government shutdown in 2005.

Pawlenty insists the cigarette "fee" is directly linked to health costs attributable to smoking, and the state Supreme Court vouched for that terminology when tobacco companies sued to block it.

Anti-tax groups, including the Taxpayers League of Minnesota, regard it as clear blemish on Pawlenty's record.

"I still call it a tax increase even though the Supreme Court blessed it as a fee, not a tax," said Phil Krinkie, the league's president and a former Republican legislative colleague of Pawlenty.

GOP primary voters looking for a Pawlenty scorecard will find a mixed appraisal from conservative groups.

The conservative Club for Growth gave Pawlenty a less-than-flattering review Tuesday, saying his ideological moorings may not be as strong as he's projecting.

"A President Pawlenty, we suspect, would fight for pro-growth policies, but would be susceptible to adopting 'pragmatic' policies that grow government," the group concludes in a white paper on him.

But the Cato Institute, which advocates for smaller government, gave Pawlenty one of four "A" grades for governors in its latest rankings. He wasn't always in the group's good graces.

Chris Edwards, Cato's director of tax policy studies, said Pawlenty's frequent vetoes, ready use of executive budget-cutting powers and advocacy of corporate tax cuts account for his high marks now.

"In the last four or five years, he has followed very much of a small-government approach on fiscal policy," Edwards said. "Perhaps he knew he was going to run for president."

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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