DFL leaders in the Legislature tried to catch their breath and regroup Friday, checking off several items on their legislative to-do list while struggling to figure out just how Gov. Tim Pawlenty's unilateral budget-balancing act might work.
But there was little information to extract from Pawlenty's commissioners as they sat before the Legislative Commission on Planning and Fiscal Policy, the forum that House Speaker Margaret Anderson Kelliher has used for much of the session to grill officials of the administration.
Late Friday, Kelliher and Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, sent Pawlenty a letter clarifying their plan to erase the deficit and balance the budget. They proposed to use $1 billion in new ongoing revenues, an education accounting shift, and additional cuts as needed.
"The drama that has resulted from your press conference could have been avoided if you had talked to us beforehand," the leaders wrote. "Nevertheless, we agree that there is ample time to come to an agreement that balances the budget in the coming biennium."
The leaders and Pawlenty are scheduled to meet 11 a.m. today in the governor's office to negotiate in hopes of reaching a budget deal.
Meanwhile, a feisty Pawlenty used his weekly radio show to expand on his announcement Thursday that he will use line-item vetoes and his budget-cutting authority to trim billions of dollars from the budget deficit.
The governor's plan is designed to eliminate a $3 billion gap between expected spending and anticipated revenues.
"You cannot spend more than you have, and they did it," Pawlenty said of the DFL leaders. If they don't close that gap, he said, "we'll fix it for them."
Speaking to reporters at the Capitol, DFL Sen. Tarryl Clark said Pawlenty's decision to balance the budget on his own amounts to an extraordinary power play. She argued that "these problems are too huge for him to be going it alone."
Thursday night, the governor line-vetoed $381 million from a $10.7 billion health and human services bill, money that would fund the General Assistance Medical Care (GAMC) program for 35,000 impoverished childless adults in the year starting July 2010.
The other budget-balancing tool cited by Pawlenty, called "unallotment," would allow him to cut authorized spending if it exceeded projected revenues for the next two-year budget period, starting July 1.
A contentious commission
Pawlenty's spokesman, Brian McClung, said that the governor's office sent an e-mail Friday to all four caucus leaders indicating the governor was available to meet within a reasonable time.
"So far, we've gotten no response at all," McClung said late Friday afternoon. "I think they've decided they would rather continue to spend their time in their legislative commission -- a commission that has heard no bills, taken no votes and accomplished basically nothing. And our administration is spending time in there with them."
The commission has become a bone of contention between the DFL-controlled Legislature and the Republican governor, with DFL leaders attempting to flush Pawlenty into open negotiations on their turf.
Pawlenty has resisted, instead sending in a parade of administrators who have engaged in a pitched back-and-forth with lawmakers.
At Friday's hearing before the commission, agency heads faced terse demands for information on potential and enacted cuts. They told legislators they were still reviewing options for line-item vetoes, accounting shifts and unallotment.
Management and Budget Director Tom Hanson declined to say how much Pawlenty might cut or how big his accounting shift would be. "We have the legal authority to do the shifts," Hanson said. "We haven't pieced the plan together yet."
When his turn came, Human Services Commissioner Cal Ludeman acknowledged that the GAMC cuts would affect "the sickest and poorest" Minnesotans -- typically those in their late 30s or beyond, making less than $7,800 a year. He said they could get coverage through other public programs when the plan expires in mid-2010.
Education Commissioner Alice Seagren testified that Pawlenty wouldn't cut payments to schools, only delay them, but didn't supply details.
At one point, Hanson reviewed potential cuts to local government aid and remarked, "This is what it will look like if the governor has to act."
"It sounds like a threat, Commissioner Hanson," Kelliher said.
"The governor is laying out what he needs to do to balance the state's budget," Hanson said.
Fearing effect, weighing change
Brock Nelson, president and CEO of Regions Hospital, said that if Pawlenty carried through with elimination of GAMC, "the impact would be devastating."
Regions would lose $35 million in 2010 and $60 million in 2011, he said, a loss that could trigger the shutdown of services most used by those on assistance.
Burn units, mental health services and emergency services could become too unprofitable to maintain, he said.
"I've been in this community since 1976," he said. "This is the worst threat I've ever seen in my professional career."
Speaking at an event Friday in Minneapolis, Pawlenty suggested that better health care reforms could be enacted next year before the cuts take effect. Minnesota's publicly-subsidized health care programs, he said, "are important ... [but] not so important that they should be allowed to bankrupt us and eliminate our ability to fund other important things."
Pawlenty, his GOP allies and DFLers long have been at odds over what cuts to make and how to find more money to patch the projected $4.6 billion budget deficit.
Pawlenty proposed borrowing almost $1 billion against revenues, a move that would patch the hole but come with long-term debt. DFLers pushed through a tax increase plan of equal size, which Pawlenty vetoed.
Staff writers Mark Brunswick and Bill McAuliffe and the Associated Press contributed to this report. kduchschere@startribune.com • 651-292-0164 plopez@startribune.com • 651-222-1288 vonste@startribune.com • 612-673-7184
