St. Paul, MN Legislators Busy Fighting the Budget Battle

A nine-day hunt in St. Paul to find $3 billion
DFL legislators and the Republican governor have little time to resolve the reconfigured budget numbers.

By BAIRD HELGESON, Star Tribune

Last update: May 8, 2010 - 10:06 PM
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This legislative session comes down to two numbers: Nine days, $3 billion.

The Minnesota Supreme Court's reversal last week of Gov. Tim Pawlenty's solo budget cuts has brought the Capitol to near-meltdown, with the state's deficit suddenly spiking overnight to an ulcer-inducing $3 billion, up from $536 million.

DFL leaders, who control the House and Senate, have been left with little time to savor their rare victory over the governor as they wrestle with the Herculean task of eliminating the new deficit by the required May 17 adjournment.

Cherished initiatives that crackled with energy a few weeks ago -- such as a proposed Vikings stadium -- appear to be legislative wreckage as legislators pledge laser-line focus on subduing the deficit.

"Some things probably just fell away," said Rep. Al Juhnke, DFL-Willmar. "There are some bills you probably don't need right now."

Not everything has been subsumed by the last-minute turmoil. Already tucked safely away are a major construction borrowing bill, a program to restore health care for the poor and a long-sought jobs bill to energize the state's economy.

As legislators take turns blaming the other party for the state's woes, the governor's staff and DFL legislative leaders are digging in over how best to resolve the state's latest fiscal crisis.

Pawlenty has renewed a call to have legislators ratify the $2.7 billion in unilateral cuts and shifts he tried to impose last summer -- the ones the state's highest court deemed illegal.

The House and Senate have rejected the governor's plea and DFL leaders are spending the weekend working on a new budget plan, which is likely to include more than $400 million in as-yet unspecified tax increases.

Showdown coming?

Herein lies the divide that could set the stage for what has become a recurring end-of-session showdown between the Republican governor and DFL legislators.

Pawlenty has been ironclad in his refusal to raise taxes. He shows no signs of softening that position in the closing days of his last legislative session as governor.
"It's the same predictable soap opera they've been using around here for decades," Pawlenty said of the DFLers. "They have an obsession with increasing taxes."
As legislative leaders and the governor's staff hunker down in closed-door talks, the operatic voices at the Capitol are booming with warring narratives from the two parties.
Some Republicans who have stood steadfastly behind the governor painted a nearly apocalyptic picture of a state edging toward penury after the court ruling.
At the same time, Pawlenty convened an emergency meeting with his cabinet Friday to draw up plans to slash services and programs in case a deluge of new budget-busting lawsuits are filed. The state's top financial officers say they fear that other groups affected by Pawlenty's single-handed budget cuts of last summer, known as unallotments, could seek redress as a class in the wake of the high court's ruling.
DFLers say Pawlenty is being unnecessarily alarmist and predict there will be no run on the state's checkbook. They are reminding legislators that just a few weeks ago, state finance officials reported that the state's bank account -- and its cash flow -- was in good shape. The perceived crisis, they contend, is a sideshow exaggerated by Republicans to get voters' minds off the fact that Pawlenty drained the state's cash account over the years, acted illegally in his cuts and then failed to prepare the budget in the event that he lost.
"The house is not on fire," said Rep. Erin Murphy, DFL-St. Paul.
If legislators and the governor don't come to a budget agreement and the state runs out of money to pay its bills, DFLers believe the state constitution requires a last-resort statewide property tax increase to pay debts.
Should such a doomsday scenario were to occur, property taxes would soar an average of 37.5 percent to cover $3 billion, according to Senate researchers.

"If the governor goes to Armageddon, this will kick in," warned Senate Majority Leader Larry Pogemiller, DFL-Minneapolis.
Path to closure
Despite the often overheated rancor, some legislators see a path to balancing the budget by the May 17 deadline.
On Saturday, the Senate Finance Committee approved $1.87 billion in cuts that largely mirror the governor's budget reductions struck down by the court. As early as Monday, llegislators could add in cuts from health and human services and other areas, along with the proposed tax hike, to come up with the $3 billion.
The package would still require a vote by the full House and Senate. Pogemiller has said the Senate could go along with a payment deferral only if taxes are raised to repay schools. It would be, he said, "a bridge to a new governing situation with a different executive who is willing to make the tough decisions."
For now, many anticipate a keen focus on the matters at hand and a timely -- albeit unpretty -- conclusion to session.
"There will be much wailing and gnashing of teeth, but in the end, I think it's very doable," said Rep. Ryan Winkler, DFL-Golden Valley.
Staff writer Mike Kaszuba contributed to this report. Baird Helgeson • 651-222-1288

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