WILLMAR -- Gov. Tim Pawlenty told Willmar business leaders Tuesday his budget plan will lower taxes and help businesses survive the economic crisis. He urged them to take that message to legislators.
"I need your help," he said.
During an early morning talk to the Willmar Lakes Area Chamber of Commerce, Pawlenty said most legislators don't have a background in private sector business and don't know what it takes to be an entrepreneur.
Minnesota's high tax ranking doesn't make it a "job friendly state," Pawlenty said. His plan, which includes cutting business taxes in half over the next six years and an up-front sales tax exemption for capital purchases, would help businesses grow and create jobs, he said.
He also said government needs to do what many businesses are now doing, including freezing wages and giving financial rewards for performance and not simply longevity. It's not right, he said, that budget increases are used to give school, county, city or state employees a pay raise just because they've been on the job another year.
With their good benefits and health care, government employees "have a pretty good gig," he said.
Pawlenty defended his proposal to reduce the level of increased funding to the Department of Human Services.
The "out of control" growth of that department's expenditures will "suffocate" the state's ability to fund other services and programs unless it's stopped, he said.
"You can't just be a social service agency," Pawlenty said.
He said he'll increase human service funding by 10 percent from the last biennium, which is half of the 20 percent the department was on course to receive. "You'd think I'd just launched World War III," he said.
Pawlenty said the state's current budget situation is not good and he fears the March budget forecast will show the deficit is getting even worse.
The economic challenges will be difficult, but he said Minnesota will get through it by making "difficult decisions" to reduce expenditures while maintaining or increasing funding for priorities, like schools.
The state's share of the federal stimulus package will help ease some of the state's financial problems, and Pawlenty said Minnesota will take every dollar it has coming to it. But he said he doesn't like some of the "strings" that are attached to the funding because it doesn't allow the state to reform programs to reduce long-term expenses.
In later comments, Pawlenty said he's willing to loosen some of the state strings that require counties, cities and schools to pay for mandates and fund "maintenance of effort" programs at current financial levels even though the needs are decreased.
He said he's putting together a proposal that would allow local elected officials to "vote themselves out of a mandate."
That provision wouldn't apply to most health and safety mandates and federal requirements. He said he favors a plan by the Association of Minnesota Counties to reduce mandates and provide flexibility.
While the challenges of the economic crisis are great, Pawlenty drew on examples of past Minnesotans who faced challenges, saw opportunities and created great successes. "We can do this, but it won't be easy," he said.