Pawlenty offers spending cut in budget talks

By Patricia Lopez, Star Tribune
Last update: May 16, 2009 - 4:37 PM

In a closed-door meeting with top legislators on Saturday morning, Gov. Tim Pawlenty offered to slice another $1.2 billion from the state spending and adopt a $1.8 billion accounting shift proposed by the House as a way to close the state's budget gap and end the session on time.

DFLers appeared open to the proposal, but said they wanted to bring Management and Budget Commissioner Tom Hanson before their Legislative Commission on Planning and Fiscal Policy to air the details in a public meeting.

"We may need public input on this in the next 24 hours," said House Speaker Margaret Anderson Kelliher, DFL-Minneapolis.

DFLers said they remain reluctant to allow the accounting shift _ a one-time device that delays spending just long enough to be counted in the next budget period _ without some type of "budget stabilization." Asked if that necessarily needed to include tax increases or fees, Senate Majority Leader Larry Pogemiller, DFL-Mpls., said they had made their position clear.

Brian McClung, Pawlenty's spokesman, said the governor "has made it abundantly clear that he is not going to raise taxes in the worst recession in 60 years."

Pawlenty also foreclosed gambling as a revenue option. Pawlenty's spokesman, Brian McClung, said that the Legislature lacks the votes to pass additional gambling measures. "Democrats in the Legislature have shown that they are unwilling to pass those bills. We're recognizing that is the status."

A small number of legislators had been pushing for either a racino, which would have added slots to Canterbury Park, or a broader proposal to allow bars to have electronic pulltabs, which some estimated could have generated about $1 billion.

Still a gap

The state faces a $4.6 billion deficit and budget proposals by the House and Senate still contain a $3 billion gap.

Both bodies offered a variety of tax increases to help fill that gap, but Pawlenty has rejected them all and now proposes to close it with a negotiated agreement of cuts and a one-time shift.

With less than three days before adjournment, DFL leaders said the proposal is not their preferred option, but the alternative could be worse. Late last week Pawlenty said that if no agreement could be reached by Monday's adjournment deadline, he would cut the budget himself through a process known as unallotment rather than call legislators into special session.

On Saturday, McClung reiterated that position.

While Pawlenty prefers negotiated compromise, McClung said, "We're not going to have a costly special session. We're not going to have a government shutdown."

Also due today is gubernatorial action on five bills, which will be signed or line-item vetoed by Pawlenty sometime before midnight. Those are: Higher education, K-12 schools, state governments, agriculture and veterans and the capital investment bill.

Of those, McClung indicated that bonding will come in for a significant trim. He said none of the bills would be vetoed outright.