Budget fix disliked by all

ST. PAUL -- Minnesota lawmakers on Monday will debate budget bills no one likes.

Not legislators. Not the governor. Not people who receive state money.

The bills cutting state spending are necessary because the state faces a $944 million deficit. Democrats who control the Legislature decided to fix the budget in steps, with the first phase coming Monday by trimming $313 million from many state programs.

The other two phases will tackle health and human services and public school education, areas that are much more controversial than things like agriculture, culture and energy on Monday's agenda. Each of the three phases would cut $300 million-plus.

"The cuts are similar in size to those proposed by the governor earlier in the session and, admittedly, they will be very difficult to absorb," Sen. Rod Skoe, DFL-Clearbrook, said. "But given the size of the immediate budget deficit, as well as the $6.4 billion shortfall projected for 2012-13, large spending reductions are a necessary part of a total budget solution."

Gov. Tim Pawlenty and other Republicans say they prefer to see an entire budget plan, instead of the phased-in version Democrats promote.

"We can't make them do a comprehensive solution," Pawlenty said, adding that he will consider a first-phase budget bill but he made no promises he would sign it.

The budget debate comes less than a year after lawmakers passed a $34 billion budget. The budget was supposed to cover two years, but falling revenues caused by a recession, mean the state has less to spend than expected.

Pawlenty chopped $2.7 billion out of the budget just after it took effect last summer, an action being reviewed by the state Supreme Court. With economic problems continuing, more cuts are needed.

Democrats say that much of their budget fix will be based on cuts, but some claim higher taxes also are needed.

Rep. Rod Hamilton of Mountain Lake, a House GOP leader, said he is awaiting more information on the DFL-written budget tweaks. "I wish they were a little more forthcoming."

Hamilton was especially concerned about the environment part of the bill, which he said cuts too much spending from programs that benefit businesses.

Overall, he said, "there are some good things as well." But Republicans and Democrats put different priorities on state programs, which leave the DFL proposals open for much debate.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said his preference is to cut budgets to fill the $944 million gap. If it is not done this year, he said, the cuts will be forced on legislators in the next budget, which economic experts say will be in worse shape than the current one.

In their budget proposals, the House and Pawlenty count on $300 million to $400 million of federal funds that Congress has yet to approve. Pogemiller said that is not wise, but since he is outnumbered, he expects the federal money to be part of the final budget solution.

The Supreme Court ruling on Pawlenty's cuts combined with unknown federal budget changes make the full budget solution difficult to predict. While most legislative leaders say they need to move forward without knowing the outcome of those two unknowns, other lawmakers prefer waiting a while to see if answers are available before forging ahead.

Hamilton worries that a court ruling could ruin any budget plan.

"We should plan either way," he said.

The House and Senate will take up slightly different bills Monday, although they both plug $313 million of the budget gap.

The biggest cuts come to state aid sent to cities and counties. The House and Senate agree on trimming those aids $105 million, with Pawlenty calling for $238 million in cuts.

"There is no doubt that communities will fare better under this legislation than the governor's," said Tim Flaherty, executive director of the Coalition of Greater Minnesota Cities. "However, we are not going to celebrate a proposal that delivers yet another blow to Minnesota cities."

Flaherty predicted the outcome of these new aid cuts, piled on top of others in recent years, will be higher local property taxes, less police and fire protection and cuts to libraries and street maintenance.

"They are going to have to find a way to absorb these," Senate Tax Chairman Tom Bakk, DFL-Cook, said.

Speaker Margaret Anderson Kelliher worried about Minnesota State College and University system schools' budgets. The proposed cuts of $47 million to $53 million, combined with earlier budget reductions, will force some schools to drop programs, she said.

Davis reports for Forum Communications Co.