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Continued: Budget deal hits Minnesota hard

  • Article by: KEVIN DIAZ and JEREMY HERB , Star Tribune staff writers
  • Last update: April 14, 2011 - 6:51 AM

WASHINGTON

Before the budget deal in Congress that averted a government shutdown, St. Paul's aging Ravoux public housing high-rise was getting ready for a $1 million makeover, with fire sprinklers, roof repairs and new plumbing.

In the deal's aftermath, as housing officials in Minneapolis and St. Paul face the loss of $4.5 million, capital improvements like the planned repairs to the 1970s-era Ravoux building are on indefinite hold.

"It means we can't make some needed repairs," said Jon Gutzmann, executive director of the St. Paul Public Housing Authority.

From public housing and local law enforcement assistance to job training and community grants, the nation's budget-trimming means real-life consequences across Minnesota. "Real pain for real people," tweeted U.S. Rep. Keith Ellison, D-Minn., who voted against the short-term budget compromise between President Obama and Republican and Democratic leaders in Congress.

With final congressional votes on the 2011 budget deal expected today, Minnesota Republicans and even some Democrats see no way around belt-tightening that will be felt from Roseau to Rochester, particularly among those hit hardest by the recession. Still to come is the battle over the 2012 budget, which President Obama addressed Wednesday, pushing for a mix of tax increases on high earners and more spending cuts.

"If you don't address the budget seriously, you can't grow the economy and grow jobs," said U.S. Rep. John Kline, R-Minn., a close ally of House Speaker John Boehner. "To me, that's the impact on Minnesota."

There are no statewide projections for how much the 2011 budget deal will cost Minnesota in federal funding. But there are consequences, both quantifiable and unquantifiable.

One of the biggest victims could be the proposed high-speed rail line from Chicago to St. Paul. Even before the historic budget impasse, the rail line to Minnesota was in jeopardy because Wisconsin Gov. Scott Walker opted out.

The budget deal now kills high-speed rail funding for the rest of the fiscal year -- a cut of $2.9 billion. That throws further into doubt the money for which Minnesota was applying after Florida rejected a similar amount of high-speed funds.

"It makes it deader," said David Levinson, a professor with the Center for Transportation Studies at the University of Minnesota.

Social programs to be hit hard

The 2011 budget deal could shortchange several other Minnesota transportation programs, though not the Central Corridor light-rail line between Minneapolis and St. Paul, which is still expected to receive about $500 million in federal funding.

Many social programs will not fare as well.

Money for local low-income housing and jobs programs was cut. Community Development Block Grants (CDBG) will drop by $650 million nationwide from 2010 levels. Local law enforcement aid, which can be used to hire officers and buy equipment like bulletproof vests, was trimmed by $434 million.

The CDBG cuts are expected to cost Minneapolis $2.3 million this year. That money was to have been spent on adult job training, small business loans, youth violence prevention and affordable housing for people dislocated by foreclosures.

"It will be felt by people trying to start small businesses, people who were foreclosed trying to find affordable housing, young people trying to stay out of gangs and find summer jobs," said Mayor R.T. Rybak. "It's pretty brutal."

Other programs once on the chopping block were spared: Head Start was funded to retain the current number of children in the program. Pell Grant funding remains intact, though students no longer can apply for two grants in one year to go to school year-round.

Title X, which covers family planning and was one of the final sticking points of the deal, was trimmed just slightly, by $17 million, to $300 million for 2011. Those cuts will be felt largely in rural Minnesota, according to Planned Parenthood spokeswoman Kathi Di Nicola. "Over half of the patients served by Planned Parenthood are rural," she said.

A compromise deal

Some of the targeted programs, like grants for women, infants and children, called WIC, had excess funds to spare that helped negotiators reach the $38 billion compromise figure.

"This compromise is just that, a compromise," said U.S. Sen. Al Franken, D-Minn.

U.S. Sen. Amy Klobuchar, D-Minn., sounded the same note of resignation. "At a time when Minnesotans are making tough choices with their family budgets, our government must do the same," she said.

For some Minnesota Republicans, the cuts don't go far enough. U.S. Rep. Michele Bachmann and former Gov. Tim Pawlenty, GOP presidential hopefuls, voiced opposition to the compromise. "The more we learn about the budget deal the worse it looks," Pawlenty said Wednesday.

Whatever the immediate effects in Minnesota, analysts on both sides promise this is just the beginning. Families USA, a health care nonprofit, estimates the Republican budget plan for 2012 and beyond could slash $32 billion in federal funding for Medicaid, Medicare and other health programs in Minnesota over the next 10 years.

While Republicans say it may be too early to say, austere times are inevitable as the nation deals with more than $14 trillion in debt.

"Whatever the facts are of the cuts, people in Minnesota and across the country best get used to them, because we have a lot more coming over the next generation," said Mitch Pearlstein, president of the Center of the American Experiment, a conservative Minneapolis think tank. "We have finally reached the stage in this country where people recognize this."

Kevin Diaz is a correspondent in the Star Tribune Washington Bureau.

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