politics

Flush with a projected surplus for the first time since taking office, Gov. Tim Pawlenty proposed a two-year budget Monday that would boost state spending by nearly $3 billion -- a 9.3 percent increase.

Education would get about half the increase, with K-12 schools snagging the biggest chunk.

Others would benefit, too. Universities and colleges, health-care providers, nursing homes, homeowners, environment and veterans all would get a boost.

But much of the money comes with strings attached. About $1 billion of new spending would go out the door as performance pay -- one-time bonuses tied to specific state-set goals.

"We have a government culture that continues to measure success by inputs," Pawlenty said. "We want to measure results. Is the money accomplishing the stated objective?"

K-12 schools, for instance, would get a 4 percent increase over two years. But a second 4 percent boost would hinge on meeting Pawlenty's performance goals.

Similarly, nursing homes would see a 4 percent increase over two years, but only if they meet performance goals. Those that fall short would get 3 percent.

The state's universities and colleges would have an extra $50 million riding on goal achievement. A scholarship program for high school students would offer money for college, but only if the student successfully completes college courses while still in high school.

Legislative leaders in the DFL-controlled House and Senate offered a cautious appraisal of Pawlenty's budget plan, saying that it offered "no leadership" on transportation, did not come close to covering the state's 80,000 children who lack health care and gave too little to property tax relief.

His plan would offer $148 million in property tax relief, slowing property tax increases for mid- and low-value homes and adding to local government aid.

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said that falls short, as does the absence of any money for all-day kindergarten, a DFL priority.

Pawlenty proposed $29 million for preschool, giving very low-income youngsters a $4,000 voucher to attend a certified kindergarten readiness program.

GOP criticism harsher

The sharpest criticism, however, came not from DFLers but from Pawlenty's own party.

House Minority Leader Marty Seifert, R-Marshall, said the surplus could have yielded $1 billion in tax relief for Minnesotans, rather than the $281 million recommended by Pawlenty.

David Strom, president of the Taxpayers League, a group that espouses a philosophy of fiscal conservatism, said the scope of the budget "took my breath away." The 9.3 percent spending increase "isn't just generous," Strom said, "it's knocking on the door of spendthrift."

And while Pawlenty does hold his budget increase under 10 percent overall, two areas of the budget stray well into the double-digit zone. Under his proposal, health and human service spending would rise nearly 19 percent over the 2006-07 budget period, while higher-ed spending would go up 16.4 percent.

That's due in large part to the $1 billion in ongoing spending required under current law. Just to accommodate increasing caseloads, health and human services requires nearly $1 billion before anything new is added.