Northern Minnesota community colleges are preparing for a hit of 26 percent: “We’re looking really hard at areas where we can share costs,” said Sue Collins, president of the Northeast Higher Education District. “We’re also looking at how we can use technology to keep costs down, and pursuing more group purchasing to reduce the cost of supplies. Our preference is to keep from cutting people or programs that students need.”

White Bear lake will be cutting weed-spraying and scaling back snow plowing:
“The focus will be more on safety and less on convenience,” City Manager Mark Sather said. “You know, that difference between plowing snow when it’s 3 inches on a Sunday, or waiting until Monday to do it. People say, ‘I can get through, and I have to drive a little slower because they haven’t been salting and sanding, but the streets are still safe.’ ”

In Freeborn County, the Dept. of Human Services working are looking at scaling back programs and instituting wait-lists.

“It’s going to boil down to the level and amount of services that the clients will be seeing because of a reduction in funding,” Freeborn County Department of Human Services Director Brian Buhmann said. “We may see a waiting list for services. And we may see families having to step up to the plate even more.”

Rep. Tom Bakk, a gubernatorial hopeful, says that thousands of jobs will be lost in the wake of the unallotment: “In determining the impact of unallotment on Minnesota employment, [State Econoimist Tom Stinson] divided direct job losses through 2011 into: local government (non school) 1,630 – 1,970 positions; state government (including higher education) 870 – 1,630 positions; school districts 300 – 600 positions; and the private sector 500 positions. An additional 1,500 to 2,500 jobs could be lost as people without jobs purchase fewer goods, the industries losing employees purchase fewer supplies, etc.”

Brainerd is looking at cuts of $269,942 in local government aid for 2009 and $622,858 in 2010. City leaders say furloughs and retirements are a definite, but are still looking at options to make up the losses. “This year is going to be a difficult year for budgeting,” City Administrator Dan Vogt said. “In the type of budget times we’re in I think we need more direction from elected officials as far as coming in with a budget you’d like to see.”

“The House bill requires that state-paid health insurance must be made available to domestic partners if a collective bargaining agreement or plan provides state paid health insurance to spouses,” he wrote. “The bill extends benefits to both same sex and opposite sex partners, I oppose this provision and will not sign a bill that includes this expansion of benefits.”

Minnesota extended those benefits briefly under Gov. Jesse Ventura. In 2003, a Republican-led House refused to ratify a labor contract that contained the benefits, and 85 families lost their health and life insurance benefits.

At a press conference Tuesday afternoon, Pawlenty said, “Unlike my friends in the DFL, who are proposing to cut education, we are increasing education.”

In a followup press release, Pawlenty’s spokesman Brian McClung said, “While DFLers have not issued a priority-based budget, they did make choices. Their plan doesn’t recognize that some parts of the budget are strategically more important. DFLers are choosing social services, welfare and publicly subsidized health care over Minnesota’s K-12 schools and students.”

But Sen. Tarryl Clark said the governor’s message is “don’t get sick, don’t get old, don’t lose your job or you’ll lose health care.”

Pawlenty told reporters that the DFL budget would raise taxes on those making $65,000 a year, but DFLers said that’s not true.

DFL chair Brian Melendez shot back, “Gov. Pawlenty is again spouting his false rhetoric about taxes, misleading Minnesotans for his own political gain. On St. Patrick’s Day, Minnesotans were hoping for a pot of gold from our governor. Instead, we got a crock — of something else. Gov. Pawlenty’s do-over budget again fails to address the economic crisis in a fair, honest, or realistic way.”

Sen. Amy Klobuchar Photo: Nancy B. Olsen

U.S. Sen. Amy Klobuchar met with 13 moderate and conservative Democrats and independent Sen. Joe Lieberman of Connecticut on Tuesday as part of a group formed by Sen. Evan Bayh, D-Ind., and based “loosely on the House Blue Dog Coalition.”

The new coalition is concerned with proposed tax hikes and spending. Klobuchar’s office said she is working to make sure any spending is fiscally responsible.

Politico reports that many in the meeting were dissatisfied with President Obama’s proposed budget, particularly tax increases on the wealthy.

Bayh, the founder of the new group of senators, said, “I do think that before we raise revenue, we first should look to see if there are ways we can cut back on spending.”

“The American people and businesses are tightening their belts,” Bayh added. “I think we need to show that the government can economize as well.”

The group is committed to working with moderate Republicans on a variety of issues.

Klobuchar spokester, Linden Zakula said, “Senator Klobuchar believes we must make investments to create jobs and long-term economic growth, but wants to ensure that we are fiscally responsible in both the short and long-term and that Washington is held accountable for its spending.”

• In Article XI, the Constitution of the State of Minnesota mandates that the government have a balanced budget. It’s been that way since statehood.

• When the the state spends more than it takes in, as happened in 2008, the state must balance the budget, a job that rests with the governor. The governor must spend down the state’s reserves before he has the authority to cut general fund programs and expenditures.

• In 2008, Gov. Tim Pawlenty took $155 million out of the reserves and $271 million out of state expenses through a process is known as an unallotment. $110 million in cuts to state expenses came out of local government aid. That $426 million deficit is separate from the $4.8 billion that is anticipated for the biennium 2010-2011.

• By law, the governor must consult with the Legislative Advisory Commission, which is made up of the senate majority leader, speaker of the House, Senate Finance chair, House Ways and Means chair and several other committee leaders in the case of an unallotment. There is no deadline for an unallotment.

• The governor does not have to take advice or direction from the Legislative Advisory Commission or the Legislature when he cuts.

• The unalotment of funds to local government aid is thought to have the most impact. Although the state budget ends on June 30, 2009, local government budgets ended on Dec. 31, and the governor unallotted funds in late December. Most municipalities had already budgeted and spent the local government aid money that was cut in the unallotment, leaving holes in many budgets.

• Minnesota operates on a two-year budget cycle. The current cycle, FY 2008-2009 began on July 1, 2007, and will end on June 30, 2009.

• Each odd numbered year is a budget year, and in 2009 the legislature and the governor will decide FY 2010-2011, which begins on July 1 of this year.

• As part of the budgeting process, economic and budget forecasts are released twice a year. In November, Minnesotans found out that the state faced a $4.8 billion dollar deficit over the next two years (FY2010-2011). In February, another economic and budget forecast will be made. These always occur in February and November.

• The total general fund expenses for the state are $34 billion for two years (FY2010-2011) or about $17 billion per year.

Photo by Lisa Yarost, Flickr

As the budget battle at the state Capitol gets going, MinnesotaRepublicans are promising to obstruct efforts to both cut expenses and raise taxes. DFLers are looking at a pending stimulus plan from the White House in February in order to guide how the budget session takes place. And at least one DFLer thinks that Gov. Tim Pawlenty might change his stance on taxes (or “revenue enhancements”) to help fill a historic $4.8 billion deficit.

House Minority Leader Marty Seifert, R-Marshall, says his caucus would not vote for any tax increases, with the only possible revenue generator an expansion of state-sponsored gambling. He called any tax increase “dead on arrival” during a press conference late last week.

Pawlenty continues to talk of “no new taxes,”but Sen. Mary Olson, DFL-Bemidji, allows that Pawlenty has indicated he would support “revenue enhancements,” and those enhancements could mean sales taxes on food and clothing.

“If I’m correct in reading between the lines, that is the kind of revenue enhancement the governor means, but I don’t know,” Olson told the Bemidji Pioneer.

On the other half of the equation to balance the budget, Seifert wants to put DFLers on the hook for what will surely be painful cuts to public programs and services. In an interview with Minnesota Public Radio’s Kerri Miller last month, Seifert said, “I probably will not be voting for any of these cuts.”

And he won’t be encouraging his fellow Republicans to support cuts either. “The budget bills coming up, I will be giving suggestions, ideas and the like on how to balance the budget,” he said. “But I can tell you that the political road is littered with the bodies of House Republicans who made tough decisions on balancing the budget.”

While the Republican caucus looks for ways to pin painful cuts on Democrats, DFLers are working toward the very real possibility that an Obama administration will be sending a large sum of money to Minnesota. MinnPost spoke late last week with DFLers who anticipate anywhere between $1 billion and $10 billion to eventually show up in Minnesota. The DFL’s first bills submitted this week are tailored to streamline any stimulus money.

Some Republicans say that if the bill does not meet their standards, they might vote to reject the money.

Photo: Lisa Yarost

As the 86th two-year session of the Minnesota legislature gets underway, Gov. Tim Pawlenty says there’s at least one option off the table to fix a state budget that faces a $4.8 billion shortfall: raising taxes.

“This challenge is going to be very difficult,” Pawlenty told leaders gathered at his Government Reform Summit on Monday. “[I]nterest groups, the stakeholders, legislators, I think, all understand that we can’t take a ‘business as usual’ approach.”

But despite his call to avoid a “‘business as usual’ approach,” Pawlenty said increasing taxes would be off the table. Minnesota hasn’t increased revenues in a decade. The period from 1997 to 2001 saw massive tax cuts and refunds in the form of “Jesse checks” (named after then-Gov. Jesse Ventura) and with the exception of Pawlenty’s 21 percent increase in fees, his “no new taxes” pledge has held from 2002 to 2008.

The co-chair for the campaign of John McCain invoked President-elect Barack Obama’s policy of holding off on tax increases until a stimulus package is passed. “It’s not wise [to increase taxes],” Pawlenty said. “It is not what President-elect (Barack) Obama is doing.”

However, Minnesota cannot legally run a budget deficit and the federal government can.

“We should live within what we’ve got,” Pawlenty said.

And we don’t have much. As Britt Robson reported for the Minnesota Independent in July, Pawlenty presided over $2.7 billion in tax cuts as House Majority leader and has resisted any tax increase in his seven years as governor. Minnesota government took a $4.3 billion cut in 2003 because of those tax cuts and the refusal to increase the amount of money the state takes in. Education, one of Minnesota’s strongest economic drivers, took a big hit.

The structure of the tax cuts has created a regressive tax system, a fact the governor’s own tax study demonstrates. Those with fewer means are paying a larger portion of their income on taxes than those who are wealthy.

Pawlenty plans to combine government services and make cuts to state-sponsored health insurance and other health and human services programs.

“Ideas that were offered include paying for performance, redesigning local government aid, getting better value in health care, reforming chemical-dependency programs, making early childhood programs stronger and more targeted, and connecting higher education to workforce needs,” Pawlenty spokesman Brian McClung said.

“We’ll be exploring these and other ideas as the governor puts together his budget recommendations.”

A letter to the editor of the Star Tribune offered a novel idea of where some money might be saved. “I’d say Tim Pawlenty’s salary of $120,000 is more than he deserved for the results of his efforts: a $5.2 billion deficit,” said Marcia Aubineau of St. Paul.

Bluestem Prairie reports that each year Walz has to send a letter to the U.S. Treasury to turn down the automatic raise in pay, including last year’s which he already declined. Spokester Meredith Salsbery told Bluestem Prairie, “[He] has to keep declining [the last raise]. We’ll send Treasury a letter that will deduct an amount equal to this year’s [cost-of-living adjustment] and last year’s COLA from each paycheck.”

Last year, Walz said he would not accept a pay increase until the federal budget is balanced. “I am committed to fiscal responsibility and to changing the way Washington works,” he said in January. “The reinstatement of pay-as-you-go budgeting has finally put this country back on the right track towards a balanced budget, but until we reach that milestone I will refuse any pay increase.”

If you go to McDonald’s and spend $4.99 on an extra value meal, you’ll save $0.01. This adds up — if you go to McDonald’s five times a week, that’s a whole extra nickel. And over a year, why, it’s $1.35! Try not to spend it all in one place. After lunch, you might head out to Best Buy to pick up the new Shawnty Lo album. You’ll pay $12.99. But after tax, you’ll only pay $13.82 — a $0.01 savings from the $13.83 you otherwise would have paid.  That’s a pretty sweet deal — buy 1,382 CDs, get the 1,383rd one free!

Now, what if your toaster breaks, and you decide to replace it? You might fork over $29.99 for a new toaster, $31.90 after tax. But that’s a four cent savings from what you would otherwise have paid! Now we’re getting somewhere! Put that together with the $1.35 you’ll save from your daily McDonald’s habit and you’ll have enough to super-size your meal at least two, maybe even three times over the course of the year!

Now, I know what you’re thinking: it doesn’t seem like purchases on everyday items are affected very much by this tax cut. But what if you need a big-ticket item? Well, yes, if you’re buying the big stuff, you’ll save some serious change. If you were to buy yourself a nice new computer, you might shell out $1,499.99 for it. After taxes, you’d be out $1595.61. But that’s $1.87 less than you’d have otherwise spent! Now we’re getting somewhere! On a $3,999.99 plasma TV, you’d save $5 on the nose — enough to buy yourself a value meal and save another penny!

Yes, if you’re the type of consumer that makes big-ticket purchases of electronics — not to mention yachts, where you could save $250 on a $200,000 purchase — you might actually see some benefit from Tim Pawlenty’s big tax cut.

Incidentally, Pawlenty did call for one tax increase on Friday. Well, not so much an increase, really, but a decrease in the property tax credit for renters, from 19 percent to 16 percent. Now, if you pay $950 a month for your 2-bedroom apartment, that will cost you an extra $342 next year.

“It’s a meaningless document,” Rep. Betty McCollum, DFL-Minn., told The Star Tribune. “Congress will set a new course and determine next year’s spending priorities based on the real needs of the American people.”

Rep. James Oberstar, DFL-Minn., was equally critical. “The budget President Bush unveiled today promises to saddle our children and grandchildren with more debt, while offering fewer services to working families,” said Oberstar in a press release. 

“Cutting back on health care for the poor and elderly will only increase the numbers of uninsured and under-insured in our country,” said Oberstar. “There were 40 million uninsured Americans when President Bush took office; today, there are 47 million, and that number will grow even larger if we enact this budget.”

“Like the President’s State of Union Speech last week, the Federal budget released by President Bush… contains no new ideas, wasteful spending and irresponsible cuts to hard-working families who most need it,” said Rep. Keith Ellison, DFL-Minn., in a statement. “The President calls for $70 billion more for the war in Iraq, while pushing mean-spirited budget cuts that would slash over $12.5 million from Minnesota’s Low-Income Home Energy Assistance Program, while jeopardizing over 35,000 Minnesota residents in public housing.” Ellison continued, “Minnesotans are, like the rest of America, clamoring for change but not the kind of change that this President’s misplaced priorities budget contain.”

“From health care, to energy independence, to safety on our streets, this budget is out of touch with the values that I hear when talking to the people of Minnesota,” Sen. Amy Klobuchar, DFL-Minn., told The Star Tribune.

While Sen. Norm Coleman said that the budget was a step in the right direction, he expressed concern over the cuts to programs aimed at low-income Minnesotans. “Clearly we need to take a hard look at entitlement spending,” he said in a press release. “I am concerned, however, that the reductions proposed by the President’s budget could result in diminished quality and quantity of healthcare for our most vulnerable populations…”

“At the same time, we need to be mindful of the impact of cutting programs that are crucial to Minnesotans,” he continued. “I am concerned about the proposed reductions in programs that put food on the table for seniors in need, keep impoverished families warm during the winter months, and help urban and rural communities. I am particularly disappointed that once again the Administration is seeking to undercut the farm safety net, which ensures that we maintain the safest, most affordable food supply in the world.”

Rep. Michele Bachmann, often loath to respond to requests for comment by non-right-leaning news outlets was candid about the Bush budget proposal during an appearance on Heading Right Radio.

Speaking of the Bush budget proposal she said, “It’s an awful lot of money. It’s $3.1 trillion. It’s a lot of money. I think the main thing I’m concerned about right now is that it seems like it’s too easy to spend other people’s money.”

Bachmann continued, “The greatest level of growth in the budget is with the entitlement [programs]. That’s really were we need to begin [budget cuts]. Eventually, down the line, we could be looking at bankruptcy. It’s far and away greater than any other aspect of the budget.”

(Actually, the greatest level of growth in the budget is defense spending at a 5.5 percent increase after inflation is taken into consideration, according to the Washington Post. So-called “entitlement programs” such as Medicare and Medicaid will take cuts under the Bush proposal.)

“President Bush released a budget that is nothing more than an announcement to bounce the biggest check yet,” said Rep. Tim Walz, DFL-Minn.,in a press release. “This budget is more of the same fiscal mismanagement that has characterized his time in office.”

“We are all in this together, which is why I’d like to see a budget that puts people first,” continued Walz. “In times of economic downturn, our first priority has to be the people who are barely making ends meet and the President’s budget doesn’t subscribe to those values.We can do better.”