CCAgenda_03Feb26 - Laserfiche WebLink

Home Browse Search

Minnesota's Big Squeeze (continued) Eden Prffirie praised Pawlenty for refusing to consider raising taxes 'The Democrats are going to eye every taxpayer as JceMillionahe and as everyone knows, Joe Millionaire is a myth," Paul;® said For now, Pawlenty's budget is only a rewmmeudatltm to the I.egielatute. It will be debated and amended and, eventually, major dements oP it are litcdy to become law "Governors have a tendency to get a lot of what they wank and we expect the same treatmenk" Pawlen- ty sffid. ht a two-hour news briefing, Paw- le~~y said, war and over that the budget m the state's biggest ever and that it proposes an overall sp®ding increase. "The elate of Minnesota is increasing its spending by 51 blllion," Pawlenty said. "It's not being cat" On a two-year baffis, Pawlenty Proposed that spending increase from about it27 billion during the Ivr- rent 2002.03 budget cycle to $'t8.1 bll- Bon during the biennhrm beginning July 1. But looking at budget dtangea over a fotu-year span masks the mod- est spending htcreases the budget Proposes between this year and next, end then the following year. The budget proposes a y12 million increase in 2009, and a S95 million increase 1d 2005. Those are htcreases of ]/10th of 1 percent and 3llOths of 1 Percent, respectively. Minnesota's budget trials steed from a predpitoua decline in the economy, end an ewompa»,y- ing drop In tax wllediona, since the spring of 2001 Pawlertty said Tue~- day that he and other lawmakers were fooled by the red-hot economy of the mid- and late 1990s. "It was a mirage," he sakL The result was plate spending lev- els and permanent tax cuts that couldn't be sustained when the tax wlledlons dropped. Pawlenty's goal fi crafting hie budget wag Fn elhni- nate a proJeded E9.2 billion dldiidt for the wmtng budget cycle and to estab- lish a;500 million reserve fiord as a hedge against further budget prob- lems. Pawlenty said Tuesday that Min- nesota is a Ligh-tax state fadng still national and internatlonel trompetl- tion For Jobe, and he adamantly rejected the notion that he should resort to tax increases to cure the deIIdt On a per capita basis, state and local taxes rank sixth in the natlon. "We cannot, la times of defldte and layoffs end war, rum to taxes,.. Pawlenty said. In June, be signed a pledge to "oppose and veto" aqV effort to raise taxes. Wayne Cox, executive dkactor of Cltlzens for Tax Justice, a research group aseodated with the AFIrC10, retorted that legislators never expected when they were carting taxes by a total of S2 bi-ton a year, that they eventually would have to cut state services to afford the tax cuts. 'Nobody ever pledged to cut famt- Res off health care to be able to pad for these tax cute," Cox said. Pawlenty proposed eliminating the y12 billion defidt end creating e budget reserve through Yom main avenues: o Spending ~L6 bWoti from the proceeds of the state's lawsuit against the tobaceo industry' and from eeveiffi smaller epedffi +acwtmte that had not been touched Proposed local aid cut Gov. Tim Pawienty's proposed local aid cuts would be phased in through 2004 but would eventually represent substantial hits in dry budgets. • 2003 local Proposed Proposed Parent of general Perrnn of general opamting gosemnngrt IGA cuN LGA cut fuml spendMg fond apeading ' Populaeon bddgat' aid ~ 2003 I 2004 2003 2004 St Paul 287 260 181 0 I 73 0 14 0 l 26 D 7 7% 15 6% _ ~ ~ ~~ ~ Duluth 66,125. 72.1 I 29 6 I 5 7 ~ 11 4 7 9% 15 8% •FlOure In milllom Source: Minnesota StMe Auditor's office. state demographerY oface, end city anance documetas. PIONEER PRESS ffi previous defidfredudion efforts. ^ Increasing revenue, partly through raising fees for nursing home care, by #200 million. . Cutting spending -some of it aduffi t'edudiona from current spending and much of'R redudions in Projected ePendmB - by EZ6 bll- lioa Delaying state payments of;357 million to school districts: PawleOty proposed to earmark s cents ofthe current 98 cents-per-pads dgarette tax to continue Paying for the medical research and medical education programs that the tobacco money now funds. Rep. Matt Entsnza, leader of the Democratic-Fazmer-labor minority in the House, celtldzed the dgarette tax proposal He effid it would pledge futm~e revenue to solve a torrent budget problem The biggest proposed spending redudion, about $819 million, would came from state-paid health tare and welfare programs. Even aRer the reduction, sPendinB in that area would etgl increase 8 percent on a biennium-to-biennium bells. Pawlenty's Proposed dlanges, most aimed ffi holding down health care wets m bringing Minnesota more into hue with other states, would lower the income level at which pregnant women qualify for state-paid health care, reduce some health care for itdanis and toddlers, and reduce funding for dderly and disabled people getting long-term care ht their homes. Another major dlange would end General Aaffiatance Medical Care, a Program that pravldes health cover-. age primarity for about 30,000 poor adults without dlffdren: Moat o[ those adulb' wverege would be shift- ed to MimeeotaCare, a state health insurance program that wets more For Minneapolis, St. Paul, Duluth and many outstare cities, the aid makes up a major part of their budgets; for most suburbs, the aid contT"<.butes little. for patients and covers less hospitffi Pawlenty also recommended alg- ni6cantly cuktlng elate aid programs that hold down dry, wanly and school dlehtet property taxes. He Teo- ommended a 2'L percent -$638 m0- lion - redudlon over the l~rent biennium State aid to dues would be cut 29 percent For Minneapolis, St Paul, Duluth and many outstare dtles, the aid makes up a major part of their budg- ets; for most suburbs, the aid wn- trlbutes little. Clues and wlmtiee, Pewlenty paid, have eo far been vhtualiy unscathed by the state's budget wcea and can afford to lose the aid without increasing property taxes 'Any cut of agything near this magnitude on local government aid would directly impact people," said Minneapolis Mayor RT. Rybelt, who said his dty would have to lay off hundreds of poBce officers, ftre8ght- era and park and library employees 1f it had to absorb a 90 percent cut in local governor®t aid. Public higher educatlon would take a big hit under Pawlenty's budg- et He proposed a 10 percent cut for Mumesota State Colleges end Uni- versifies and a 15 percent for the Uni- versity of Minnesota Pawlenty sffid he wants both syetetna to limit their tuitlon inrseases to 15 percent But he also proposed kuaeasing state 5nendffi std that goes to low= and moderete-inwme students who attend public end private colleges The public employee payv freeze that Pawlenty recomm®ded .was proposed several weeks ago by Sen- ate Republitxms. Finance Commis- sioner Dan McElroy said Pawlenty will urge the Leglslatlue to pass a law that would, in effect, suspend public employee bargaining laws dur- ing the next two years. "We need to make sure that our public employee wages ere not wn- trlbeting to a runup ht the cost of government," Pawlenty said. Pete Benner exewtlve director of Coandl 6 oP the American Federation of State, County and Munidpffi Employees. the largest state workers' union, said some employees might accepts freeze, but the issue should be negotiated. Union officials also said a freeze would hlndeF the ability of wanly hospitals and adlool diahtcte to attract and retain quality employees The budget would substantlelly end general fund ependhlg on the Lawful Gambling Control Board, the Amateur Sports Commission, the Cempffign Finance and Public Digdo- sure Board and the Minnesota Rec- 1ng Commission. The budget assumes that those agendas would intx~eage fees to pay for their opera- tlonsandthe services tlleyprovide. Patrick Stneenep covers state govent- mentand politics.. He can 6e trenched a! psmeeneg@ ptoneerpress.com or (0SI) 2a8-3233. • • Finance Commissioner Dan McElroy outlines spedfia of the governor's proposed budget. ProjeRed behind him is a graph showing how the govemor's spending plan puts the state back in the black, compared to the deficits projected in a November 2002 budget forecast, through fiscal year 2007.