Area legislators reacted sharply to Gov. Tim Pawlenty’s plan for deep cuts in state aids to local governments and health and welfare programs in order to eliminate a projected $1.2 billion deficit in the current budget.
“What he’s doing is criminal,” said Rep. Tom Rukavina, DFL-Pike. “He’s going after the most vulnerable and throwing taxes and fees onto the middle class, all to help the wealthy.”
Other DFLers called Pawlenty’s reliance on federal funds to balance the budget “hypocritical,” considering that he regularly criticizes President Obama for federal stimulus spending. “I think it’s a little disingenuous that as governor Pawlenty is banking on another $400 million in federal money to balance his budget, while candidate Pawlenty travels the country bashing it,” said House Majority Leader Tony Sertich, DFL-Chisholm.
The governor released his budget cutting plan on Monday. The proposal would slash local government aid by $250 million in the current budget and by $500 million in the upcoming biennium. Unlike similar cuts in the past, this one would not exempt cities under 1,000 population, so the cuts would impact cities like Cook, Tower, and Orr, which had been spared the LGA cuts approved last year (see related story page 1).
Pawlenty’s plan cuts deeper than would otherwise be necessary, in order to pay for a series of tax cuts for businesses. Pawlenty said the tax cuts, which include a 20 percent cut in the corporate income tax, should help spur job creation.
Sertich criticized the corporate tax cut, noting that much of it would go to companies based in other states. “Studies show that at least 50 percent of this corporate tax cut would benefit companies outside of Minnesota. His plan actually grows the deficit, especially after he’s gone,” said Sertich.
Local government aid cuts
The local government aid reductions will hit cities hard, but counties won’t escape the cost-cutting either. A total of $107 million will be cut from the state’s 87 counties. The governor’s budget proposal also takes aim at two Iron Range funds. The governor proposes to cut $30 million from the Doug Johnson Trust Fund, otherwise known as the 2002 Fund, and $5 million from the 21st Century Minerals Fund.
Rukavina called the move a “slap in the face.” “The 2002 Fund is local property tax money. How much local property tax did he take from Edina?” Rukavina asked.
DFLers complain out that Pawlenty’s cuts in LGA have forced city officials across Minnesota to raise property taxes. “It’s a direct connection,” said Rukavina.
Health and welfare cuts
Pawlenty’s plan would also cut $347 million from state health and human services programs, affecting individuals, hospitals, and service providers.
Under the proposal, about 40,000 Minnesotans would lose some form of health care coverage or special program assistance. An estimated 20,000 adults without children would lose access to MinnesotaCare. Hospitals, nursing homes, and other care providers would see reductions or smaller increases than previously approved.
Higher education
While the governor’s proposal largely spares K-12 education, it does make additional cuts to the state’s higher education budgets. Under the plan, the University of Minnesota would face a $36 million cut with the Minnesota State Colleges and Universities (MNSCU) would be hit with a $10 million reduction.
Rukavina said the cuts will force higher tuition prices, a trend under Pawlenty. “Since 1999, when Tim Pawlenty was majority leader and now governor, tuition at the University of Minnesota has risen 147 percent, 117 percent at MNSCU colleges, and 101 percent at community colleges,” said Rukavina. “During that same period, the consumer price index rose by only 29 percent. Rising tuition is just another form of tax increase.”
